NEW YORK,NY --According to the latest Trepp Payoff Report,
the percentage of loans paying off on their balloon date registered 59.5% in
May.
This was more than five points below the April reading of
64.6%. The May reading was the second lowest of the year, but was above the
12-month moving average of 55.3%.
(The 12-month
average sums the averages of each month and divides by 12, there was no balance
weighting across the months.)
By loan count (as opposed to balance), 69.1% of
loans paid off. The 12-month rolling average by loan count is now 61.8%.
It might be tempting to attribute May's decrease to
increasing Treasury yields and widening CMBS spreads, but that would be off
base.
Most of the spike in the 10-year Treasury rate and surge in
CMBS spreads took place over the last two weeks, which is too recent to impact
the May numbers.
If we are going to
see a slow down in refinancings as a result of the current conditions, we would
expect to see it begin in July or August at the earliest (assuming rates and
spreads don't reverse course between now and then).
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