are the real winners under such conditions.
To better understand the extremely favorable mortgage market conditions for
borrowers, trends reflecting treasury pricing say it all as follows:
* Treasuries are gradually climbing upward with 5-year treasury notes yields peaked at their highest levels not seen since the summer of 2011,
while 10-year notes stay in excess of the two-percent mark since last May.
* Funding sources are moving up the risk curve mainly by offering more leverage. Thus, the focus within the industry is on treasury movements. Should treasuries stay within a predictable range, more forward-delivery and other creative longer-term fixed-rate products will re-emerge.
fundamentals in supply versus demand for space.
* With the threat of higher interest rates looming, permanent lenders are liberalizing prepayment privileges for longer-term debt, hoping to remove the burden of lower yielding debt in the future.
* With banks, conduits, life companies and other private/public debt funds crowding the marketplace, less pricing differentiation is noticeable, particularly for conservative, lower leverage loans.
"The overall economy continues improving with real estate fundamentals enjoying the benefits", says Jeanne Peck, a director of the Real Estate Capital Institute. "Markets are carefully watching Treasuries, particularly short- and medium-term maturities - those most commonly linked to commercial real estate debt. Investors may be underestimating how fast the Fed can
The Real Estate Capital Institute(r) is a volunteer-based research organization that tracks realty rates data for debt and equity yields. The Institute posts daily and historical benchmark rates including treasuries, bank prime and LIBOR. Furthermore, call the Real Estate Capital RateLine at 7RE-CAPITAL (773-227-4825) for daily rate updates.
The Real Estate Capital Institute(r)
3517 West Arthington Street
Chicago, Illinois USA 60624
Contact: Jeanne Peck, Executive Director