Monday, September 10, 2018

Real Estate Capital Institute Predicts Fed Will Raise Rates Again by Year End



John Oharenko


Chicago, IL -- With inflation progressing slightly above the 2%-mark and the domestic economy showing uninterrupted growth, the Fed is expected to raise rates one or two more times by yearend. 

 That said, benchmark 10-year treasuries are stubbornly low, at levels consistent with late spring/early summer.  Mortgage spreads are also flat, translating to
interest rates typically in the lower 4% range for floating-rate loans, and approximately 4.5%-to-5% for fixed-rate debt.

With mortgage rates predicted to reach higher levels combined with ongoing new construction supply, buyers take a cautionary wait-and-see attitude towards select multifamily, lodging and industrial deals.  

The retail property sector still is bargain-hunter's turf, while office deals remain
selectively targeted.  As a rule, infill deals of various property types are in highest demand, while value-pricing typifies suburban assets. 

As investors get a better grip on supply/demand dynamics and interest rates,pricing uncertainty prevails.  As such, fresh acquisition financing activity
is limited, and refinancing and takeout loans represent the bulk of debt volume.

John Oharenko, executive director of The Real Estate Capital Institute's(r), suggests, "As summer ends, expect more pricing discovery for both debt and
equity deals.  More attractive pricing may be on the horizon for patient investors."

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.  

Contact:

 John Oharenko, Executive Director

The  Real Estate Capital Institute(r)
3517 West Arthington Street
Chicago, Illinois USA 60624


No comments:

Post a Comment