Agency Multifamily Loan Rates
Recent Updates:
UST10 yields at 4.18% as we write, 15bps higher than just last week at this time, and a whopping 53bps higher than where they were the day before the Federal Reserve cut interest rates a little over a month ago. Fed Fund and US Prime rates have fallen by 50bps, but all other market driven rates have done exactly the opposite and increased by at least 50bps in the same period. Continued strength in the economy carries the day. The international Monetary Fund published an expected growth rate for the USA of 2.6% in July. Combined with current inflation of let's say 2.4%, that argues for even higher medium-term interest rates (4.50-5.00% area) in the future. For a different angle, consider the $1.8 trillion US budget deficit and the prospect for that to grow regardless of which administration ultimately wins the upcoming election, shifting demographics, and the desire to on-shore significant parts of the economy, and how all of that may impact those same rates. Our conclusion remains that Investors and borrowers should focus on the fundamentals impacting their specific benchmark (i.e. UST + credit spreads) when evaluating decisions and not necessarily wait to see what the Fed does at their next meeting.
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Rates are provided by Freddie Mac and Fannie Mae