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Archive for the ‘Multifamily Mortgage Rates’ Category

Treasury market rallies.  From their late-July all-time lows, UST yields bounced dramatically, buoyed by better US economic data, especially an improvement in July payrolls growth.  By mid-August, the 10Y UST yield climbed +48 bps to 1.86%.  However, since then, UST yields retraced after the FOMC delivered surprisingly dovish minutes and markets re-focused on European sovereign debt concerns.  This morning the 10Y UST yield hovers near 1.57%.  

Quiet August cedes to busy September.  The most important development amidst an otherwise quiet late-August was the release of the FOMC minutes.  These minutes were quite dovish and indicated that at the Aug-1st FOMC meeting ”many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of economic recovery.”  

Subsequently, at the Fed’s Jackson Hole symposium, Chairman Bernanke emphasized his ”grave concern” about the US labor market and “the enormous suffering and waste of human talent it entails.”  As a result, markets expect the Sept-9th FOMC meeting will shift the Fed’s “low for long” rate rate guidance into 2015; and announce a new, modest round of asset purchases (QE3).  This program will likely involve MBS and, possibly, also Treasuries; but may initially have a smaller size and duration (such as $150B for two months).  

Spotlight on Europe.  At their Sept-6th meeting, we expect the ECB to indicate the contours of a new SMP framework for bringing funding costs of troubled EMU members to more economically sensible levels.  While there is ample scope for surprise, JPMorgan analysts expect an ECB effort to bring down risk premia by buying the shorter end of sovereign bond markets of countries compliant with ESFS conditionality (e.g., Portugal).

 Beyond the ECB meeting, other risks loom large in September, including:

• ·         The German Constitutional Court decision on on the legality of the European Stability Mechanism (ESM) and the Fiscal Compact;
• ·         The Dutch elections; and
• ·         Moody’s ratings reviews of Spain, Austria and France.

As such, headwinds from Europe could intensify over coming weeks. 

Generic 5yr UST Snapshot

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Rates bounce as central banks disappoint and payrolls surprise.  It was a volatile week for yields, as 10Y and 30Y UST yields traversed ranges of 22bps and 18bps, respectively.  First, FOMC inaction disappointed expectations for further Fed easing.  Then, risk appetite deteriorated after the ECB to failed to follow through on Draghi’s promise to do “whatever it takes” to save the EUR.  Finally, an upside surprise on US July payrolls (+163K) propelled yields back to their two-week highs.  

Hopeful indications from the ECB.  While the Aug-2nd ECB meeting failed to deliver specific policy action, the ECB provided an outline of future actions that could amount to a “game changer” in the eventual resolution of the EMU crisis.  These actions include:  (i) an easier collateral framework for future long-term liquidity injections (LRTO’s); (ii) significant buying support for shorter-dated peripheral bonds; and (iii) rescinding ECB seniority relative to private sector bond holders.  

These steps will need to be complemented over time with many other measures such as:

• ·         Not forcing countries into recession to achieve greater austerity;
• ·         Enlarging the EFSF/ESM ability to purchase sovereign debt; and, most important,
• ·         Creating democratic legitimacy to central fiscal control and funding.

FOMC inaction.  The Fed delivered no new asset purchase program; no cut to the interest rate it pays on reserves; and no change to the late 2014 interest rate guidance.  However, the FOMC statement strengthened the Committee’s pledge to act in the future if, for example, the labor market fails to improve and/or Europe melts down. 

Client activity.  With rates near all-time lows, we continue to see strong client interest in forward rate locks; as well as in hedging LIBOR-based debt.  Ongoing client liability management, including extension activity around R/C’s and Term Loans, offer swap restructuring opportunities.

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Yields bounce.  After setting a new all-time low below 1.40% early last week, the 10Y UST yield bounced to 1.59% on Friday.  Meanwhile, the 30Y UST yield jump +22bps, to a Friday high of 2.67%.  Yields reversed direction after headlines suggested imminent new policy moves from both the Fed and the ECB.   Improved risk sentiment lifted risk assets:  from Wednesday through Friday the DJIA climbed 400 points (+3.2%).   

High expectations for Aug-2nd ECB meeting.  As Spanish 10Y yields touched a euro-era high of 7.70% on Thursday, ECB president Draghi said the ECB will do “whatever it takes” to preserve the EUR.  Draghi asserted, “To the extent that the size of the sovereign premia [borrowing costs] hamper the functioning of the monetary policy transmission channels, they come within [the ECB’s] mandate.” Draghi’s remarks encouraged expectations for renewed ECB peripheral bond buying.  His comments were reiterated in statements by French President Hollande and German Chancellor Merkel, who said they are determined to protect the Euro.  Subsequent news stories cited upcoming ECB/Bundesbank consultations and the possibility of a new multi-pronged effort by EU governments and the ECB to stabilize peripheral bond markets.  

Aug-1st FOMC meeting.  Likewise, recent news stories spurred expectations that Fed officials are moving closer to fresh stimulus measures.   While the consensus view now expects further stimulus, questions remain on timing (Wednesday’s Fed meeting, Bernanke’s Jackson Hole speech at the end of August, and/or the September Fed meeting); as well as on format (extended low rate guidance, QE3, and/or a cut in the interest rate paid by the Fed on excess reserves).  

The week ahead includes important events and economic data.  In addition to the FOMC (Aug-1) and ECB (Aug-2) meetings, Friday brings the U.S. July employment report.  The consensus expects payrolls to add +97k new jobs while the unemployment rate holds steady at 8.2%.

Here are some rates for multifamily loans for both banks and agency loans. 

Rates have gone up a little with increase in US treasury.  However you can still find commercial mortgage rates at all time lows. 

To get accurate pricing and discuss your loan scenario, please call us at 310-598-5939 or email at info@citycapitalfinance.com

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Yields soften.  Over the past two weeks, the Treasury market rallied significantly and the yield curve flattened as 2Y yields fell 6bps; 5Y yields fell 10bps; 10Y yields fell 16bps; and 30Y yields fell 18bps.  Meanwhile, swap rates hit all-time lows across the curve.  The rally reflected ongoing weakness in US economic data; solid demand at last week’s 10Y and 30Y UST auctions; and modest widening in European peripheral spreads as the market refocused on the implementation risks associated with EU summit initiatives.  

US economic data continues to disappoint.  Economic data has generally remained weak, with businesses remaining cautious about hiring and manufacturing data suggesting the weak growth is likely to continue in Q3/12.  Nonfarm payrolls increased only +80k in June; and the Q2 monthly job creation run-rate fell to +75k from a +225K monthly average in Q1/12.  JPMorgan economists continue to forecast 2.0% GDP growth for H2/12; but next week’s economic calendar should provide considerably more information about how the economy was performing at mid-year.  

Uncertain policy outlook.   Many point to the overhang of fundamental uncertainty as a cause of the mid-year growth slump.  Last week’s FOMC minutes suggested the Fed is more reluctant to embark on a new round of QE than previously thought.  Likewise, the ECB undermined the impact of its recent rate cut by downplaying expectations for further rate cuts.  Outside of central bank action, the outlook for fiscal policy remains even more clouded.  Intense debate in the Euro-area casts doubt on the prospects for fiscal integration.  Meanwhile, the US Congress is unlikely to agree to a medium term fiscal plan until after the November election.  

The week ahead will bring most of the important economic data for June, including retails sales; CPI and PPI; industrial production; housing starts and the Fed’s Beige book.  In addition, Fed Chairman Ben Bernanke will appear before Congress with his semi-annual economic assessment.  

Snapshot of UST curve:

2y: 0.23%

5y: 0.61%

10y: 1.48%

Economic Commentary

China’s economy grew at its weakest pace in three years. GDP grew at a 7.6% rate in the second quarter, down from 8.1% in the first quarter, making the sixth consecutive quarter of slowing growth. China is under enormous pressure to maintain steady economic growth as it is viewed as one of the few motors strong enough to power the global economy through this financial turmoil.

Commercial mortgage rates have been at all time lows.  Interest rates are based on the cash flow, quality of the property, borrower and location of the commecial property.   Here are range of rates and programs for commercial loans but please keep in mind that these rates are for informational purposes only and always changes.  To get a more accurate rate, please contact our office at 310-598-5939.

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Multifamily and apartment mortgage rates have been at all time lows.  Rates are based on the quality of the property, borrower and location of the asset.   Here are range of rates for different terms for multifamily loans but please keep in mind that these apartment mortgage rates are for informational purposes only and could change.  To get a more accurate rate, please contact our office.

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