Category Archives: Economic Outlook

NY Times – U.S. Economy Grew at 4% Rate in Second Quarter, Beating Expectations – NYTimes.com

JULY 30, 2014 – Dionne Searcey, NY Times | The United States economy rebounded heartily in the spring after a dismal winter, the Commerce Department reported on Wednesday, growing at an annual rate of 4 percent from April through June and surpassing economists’ expecations.In its initial estimate for the second quarter, the government cited a major advance in inventories for private businesses, higher government spending at the state and local level and personal consumption spending as chief contributors to growth. Economists, who had been hoping for a full reversal of the first quarter’s decline, were cheered by the second quarter’s numbers. The consensus forecast for G.D.P. was 3 percent.

via U.S. Economy Grew at 4% Rate in Second Quarter, Beating Expectations – NYTimes.com.

Fed, Confident in Economy, Details End of Bond-Buying Program – NYTimes.com

WASHINGTON 07/09/2014  — The Federal Reserve said on Wednesday that it planned to stop adding to its bond holdings in October, in a sign of its confidence that the economy is gaining strength even as the central bank gradually withdraws its support.

via New York Times  Fed, Confident in Economy, Details End of Bond-Buying Program – NYTimes.com.

CNBC | ‘Shell shock’ bond move sends yields to pre-taper low

BY Patti Domm, CNBC

[MAY 14, 2014 ]Global bond yields are in a deep slide, taking the 10-year U.S. Treasury to a level not seen since October—well before the Fed began winding down its easy money program.

The common themes are accommodating central bankers and concerns about growth. In the U.S. a short position in Treasurys continues to support the market as investors are forced to cover with each notch higher in price and lower in yield. Yields were lower across the curve, but the 10-year yield broke below a range that it has held since the end of October, touching a low yield of 2.52 percent.

via ‘Shell shock’ bond move sends yields to pre-taper low.

Apartment REITs returned to 12.75% in Q1

[CNBC, 04/02/2014]  a lot of folks thought that the housing recovery would weaken rental demand and in fact, that sentiment hit the apartment reits pretty hard last year. investors were concerned about overbuilding. fast forward to the first quarter of this year. rental demand is still very strong. vacancies down 20 basis points to just 4% according to reit. rents continue to grow up over 3% from a year ago. they would be higher but landlords say that weak income growth is holding them in check. so with all that, it seems that investors have come back to apartment reits this quarter with a vengeance. the sector returned 12.75% in q-1 making it the top yielding of all commercial reit sectors.

via Apartment REITs returned to 12.75% in Q1.

How Proposed Johnson/Crapo Legislation Could Affect Multifamily | Multi-Housing News Online

By Jessica Flur, Senior Editor

MULTI-HOUSING NEWS ONLINE

Washington, D.C.—Recently Senate Banking Committee Chairman Tim Johnson (D) and Ranking Member Mike Crapo (R) drafted the Federal Housing Administration Solvency Act of 2013. If passed, this bill would have a direct impact on Fannie Mae and Freddie Mac and calls for the creation of a new enterprise called the Federal Mortgage Insurance Corporation (FMIC).

MHN talks to Willy Walker, CEO of Walker & Dunlop, about this new proposed legislation and how the bill could affect multifamily if it passes.

via How Proposed Johnson/Crapo Legislation Could Affect Multifamily | Multi-Housing News Online.

Charting a Course Through a New Multifamily Lending Landscape | Multi-Housing News Online

By Summer Gell, Partner Engineering and Science Inc.

MULTI-HOUSING NEWS

(MARCH 21, 2014) Multifamily housing investors’ options for financing sources have been shifting lately, and Fannie Mae’s recent major revisions to the Multifamily Selling and Servicing Guide–which went into effect in February 2014–are adding another layer of complexity to the multifamily lending landscape.

Fannie Mae’s Guide revisions included underwriting standard changes in addition to significant changes to the third-party engineering due diligence required for multifamily mortgage loans, more specifically the policies for Physical Needs Assessments (PNA, also called a Property Condition Assessment by other lenders) and Seismic Risk Assessments (SRA) for properties in high risk seismic areas.

via Charting a Course Through a New Multifamily Lending Landscape | Multi-Housing News Online.

Weak U.S. inflation, housing data point to sluggish growth | Reuters

(Reuters) – U.S. inflation was muted in February and housing starts fell for a third straight month, giving the Federal Reserve plenty of room to keep interest rates low even as it scales back the amount of money it is pumping into the economy.

The data, which came as the Fed opened a two-day policy meeting, painted a picture of sluggish economic growth in the first quarter as unseasonably cold weather disrupted activity. A jump in building permits last month, however, also offered cautious optimism for an acceleration once the weather warms up.

via Weak U.S. inflation, housing data point to sluggish growth | Reuters.

Axiometrics, Inc. | Permitting Report: December 2013

(Axiometrics, Inc.) The U.S. Census Bureau’s metropolitan statistical area (MSA) residential permitting report for December 2013 reflected a sharper slowdown in permits than expected.

The statistics, released on January 17, showed that privately owned housing units authorized by building permits in December were 986,000, measured on a seasonally adjusted annual rate (SAAR). This represented a decrease of 3.0% from the revised November rate of 1,017,000, though it is still 4.6% higher than the December 2012 estimate of 943,000. Consensus estimates furthermore called for an additional 0.3% decline.

via Permitting Report: December 2013.

Economy Watch: January Jobs Numbers Mixed, Budget Deficit Shrinks | Multi-Housing News Online

By Dees Stribling, Contributing Editor, MHN Online

The tepid increase in U.S. jobs in January had economists, who had predicted renewed strength after December’s subpar report, puzzled about the situation. Even so, some segments of the economy created a fair number of jobs last month, according to the Bureau of Labor Statistics.

The construction industry, for instance, saw a surge of hiring, adding 48,000 jobs during January, which more than offset a decline of 22,000 in December. There were job gains in both residential and nonresidential building (up 13,000 and up 8,000, respectively) and in nonresidential specialty trade contractors (up 13,000). Heavy and civil engineering construction added 10,000 jobs.

via Economy Watch: January Jobs Numbers Mixed, Budget Deficit Shrinks | Multi-Housing News Online.

 

CRE Industry Faces Dramatic Changes in Multifamily Supply, Financing Environment – CoStar Group

The U.S. apartment market continued to see robust growth in 2013, but investors are keeping a wary eye on looming changes going into 2014, including the impact from rising supply, rising interest rates and the prospects of restructuring the nation’s two biggest government-sponsored enterprises (GSE’s) Fannie Mae and Freddie Mac.

via CRE Industry Faces Dramatic Changes in Multifamily Supply, Financing Environment – CoStar Group.

When supply increases; demand decreases. Buyers should remain sensitive to overpaying for multifamily properties in low cap markets, as the market continues to turn.