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| John Oharenko |
Chicago, IL -- Chicago, IL-based Real Estate Capital
Institute (RECI) finds interest rates continue
heading into record-low territory.
Over the past month, rates dropped
about 40 basis points, approaching the lowest levels of the current
administration.
Key concerns focus on slowing
global economic growth and the US trade war with
China/Mexico. Fed fund futures suggest a quarter point rate
decrease is on the horizon by this fall.
John Oharenko, director of the Real Estate Capital Institute®, notes
"Interest rate worries are overshadowed by the overall economic
outlook. That said, real estate markets are mostly healthy."
Mortgage rate spreads remain
unchanged for both long-term and short-term pricing. Higher leverage
multifamily debt (80%) can be had in the lower 4%-range with agency
debt.
Life companies offer loans in the
higher 3%-range with more modest leverage (65% or less). Debt funds
and conduits compete in the 4.5%-to-5.25% range based on a wider risk and
leverage profile. Banks also hover in the 4%+ rate territory
for floating rate debt.
Regardless of lending format,
rates are extremely competitive by historical standards. Pricing
differences between various funding programs and lender types are at very tight
margins.
Some lenders are pulling out of
debt markets due to profitability concerns. However, the supply of
mortgage funds is abundant.
CONTACT:
John Oharenko
Executive Director
john.oharenko@reci.com
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