TWiRP – October 31, 2015

This week in rental property, mortgage rates slipped to 3.76 percent with the Federal Reserve keeping its key short-term interest rate at a record low. Mortgage applications were down by 3.5% in September amid low fixed mortgage rates. Growing number of investors are shorting the Canada’s housing market. U.S. rental prices cooled in September but still rose above the inflation rate. Lastly, we take a look on U.S. rental market and overall economy at a glance.


Average US rate on 30-year mortgage slips to 3.76 percent; 15-year loan stays at 2.98 percent

Average long-term U.S. mortgage rates were slightly lower to unchanged this week amid expectations that the Federal Reserve isn’t ready yet to raise its key short-term interest rate. Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage slipped to 3.76 percent from 3.79 percent a week earlier. The rate on 15-year fixed-rate mortgages stayed at 2.98 percent. It was the 14th straight week of rates below 4 percent, and they are well below last year’s levels. A year ago, the average 30-year mortgage rate was 3.98 percent, while the rate for 15-year loans was 3.13 percent:


Mortgage applications down 3.5% on fewer rate swings

Wide weekly swings in mortgage applications seem to have calmed down, now that new lender regulations have been in place for nearly a month. Total application volume decreased 3.5 percent on a seasonally adjusted basis for the week that ended Friday versus the previous week, according to the Mortgage Bankers Association:


Fed keeps rate at record low but will consider an increase at its next meeting in December

The Federal Reserve is keeping its key short-term interest rate at a record low in light of a weak global economy, slower U.S. hiring and subpar inflation. But it signaled the possibility of a rate hike in December. A statement the Fed issued Wednesday said it would monitor job growth and inflation to determine “whether it will be appropriate to raise the target range” for its benchmark rate at its next meeting. It marked the first time in seven years of record-low rates that the central bank has explicitly raised the possibility that it could raise its key rate from near zero at its next meeting:


Why investors are shorting Canada’s housing market

A growing number of investors are betting Canada’s frothy property market will nosedive, according to research firm Markit, as low energy prices drag down the country’s economic outlook. Investors are taking out an increasing number of “short” positions on banks and insurers with high exposure to the property market, Markit explained, with these investors expecting share prices to slide. This comes amid record low interest rates in the country— which have been cut twice this year, down to 0.5 percent:


US Rental Home Prices Rose at Slower Pace in September

The U.S. home rental market cooled in September. The slowdown hit major hubs of the energy industry such as Dallas, Houston and Tulsa, while moderating the boom coming in tech centers such as San Francisco, San Jose and Denver. Real estate data firm Zillow said Tuesday that median rents rose a seasonally adjusted 3.7 percent from a year ago, down from the annual pace of 4.1 percent in August. The slowdown likely reflects the 14.8 percent surge in apartment construction during the first nine months of 2015, as increasing supplies have tempered price appreciation:


Data Visualizations: U.S. Rental Vacancies and Vacant Housing Units

The U.S. Department of Commerce’s Census Bureau published quarterly data on nationwide rental vacancies, defined as the proportion of rental housing inventory that is vacant for rent. For the quarter ending in September 2015, the vacancy rate for rental housing was reported at 7.3%, an increase of 0.50 percentage points from 6.8% last quarter, and an increase of 0.20 percentage points from the 7.1% vacancy rate reported in March 2015. The homeowner vacancy rate reached a high of 11.1% in September 2009:–u-s–rental-vacancies-and-vacant-housing-units-160452598.html



Capital flows into commercial real estate are expected to remain strong through fourth-quarter 2016, though amounts could be impacted by high prices and valuations, rising rates and economic uncertainties, according to the October edition of “the BRIEFING,” a report compiled by Transwestern that covers the national and global economy, capital markets and commercial real estate: