News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Jonathan Smoke / Hanley Wood / August 23, 2013
The Commerce Department reported the first read of July new home sales this morning with a headline of a month-over-month 13.4 percent decline. The July number came in at 394,000, compared to the revised June reading of 455,000. Economists had been expecting a reading of 487,000, which would have been a 2 percent decline from the original June number of 497,000. Despite the eye-popping decline, the month-to-month change was not statistically significant, meaning that we should generally view the monthly trend as unchanged.
What is going on with these numbers? The Commerce DepartmentRead More
Mark Heschmeyer / CoStar / August 7, 2013
Although Cost of Borrowing May Go Up, Investor Risks Appear Low
Analysts believe it is becoming more and more likely that commercial real estate loans coming due in the next few years will face a higher rate environment. However, the strengthening economy is expected to offfset near-term investor risk.
Two notable commercial real estate developers and investors support the assessment that property fundamentals are catching up to the valuations created by strong capital flows into the property markets.
Owen D. Thomas, CEO of Boston Properties, said, “If interest rates go up it’sRead More
Michael Neal / NAHB / August 5, 2013
According to Freddie Mac, the average interest rate on a 30-year fixed rate mortgage rose by 8 basis points over the week to 4.39%. Since the beginning of the year, mortgage rates have risen by about 1 percentage point and are now at a level last seen in August 2011.
The rapid rise in mortgage interest rates could affect housing affordability through higher monthly mortgage payments. However, monthly mortgage payments are not the only path by which rising interest rates can affect affordability. Homebuyers can instead decide to raise their downpayment amount in order to maintain an otherwiseRead More
Madison Inselmann / Metrostudy / June 28, 2013
Ben Bernanke moved markets with his comments after the recent Federal Open Market Committee meeting when hinting that the Federal Reserve will/may/could/should back off of its $85 billion a month bond buying program. As a result, the stock gyrated wildly like an 7.0 Richter Scale earthquake printout driving a notable jump in interest rates. Similar to the violence of being startled awake from a deep sleep, after a four year monetary policy drumbeat…the market had a mild heart attack as it was shocked from it’s comfort zone.
Of course things have normalized, to a certain degree, as theyRead More
Ylan Q. Mui / The Washington Post / June 26, 2013
The Federal Reserve is becoming concerned that the recent spike in interest rates could disrupt the rebound in the housing market and force the central bank to delay plans to scale back its multibillion-dollar economic stimulus.
The Fed believes the economy eventually will be strong enough to handle a pullback in stimulus, likely in the fourth quarter. But a prolonged rise in interest rates for mortgages and other loans would become a key factor in the central bank’s decision.
Chairman Ben S. Bernanke said last week that the Fed is monitoring these rates but expressed hope that consumer confidenceRead More