Small Balance Market Resiliency Comes into Focus to Start 2019 Ever since the Federal Reserve increased short-term interest rates in the waning days of 2018, the conversation has shifted from when will rates rise again to will the Fed have to lower rates? Markets currently peg the probability of at least one rate cut in 2019 at about even odds. However, this does not mean a downturn is imminent. By several measures, the economy is performing at its highest capacity of any point since before the financial crisis. Whether a period of economic weakness is years away or just around the corner, the small balance multifamily sector is projected to remain healthy. For more on the small balance multifamily sector, read Arbor Chatter’s “Q1 2019 Small Balance Multifamily Investment Trends Report.” Explore charts and insights, including: Lending Volume Cap Rates & Spreads Interest Rates Leverage & Debt Yields
As commercial real estate investors move further out on the yield spectrum, they are increasingly considering the single-family rental (SFR) asset class. Large portfolio transactions have made headlines in recent years, yet individual investors still own 80% of the SFR marketplace.
Young adults in multifamily properties are less likely to still be living with their parents compared to the overall young adult U.S. population, which includes those in owner-occupied homes and all rental housing.
A growing share of older renters is living alone, with small asset properties experiencing robust gains from this demand segment.
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While a large share of millennials still lives with roommates, this age group is beginning to move out on their own or starting families as they age.
Smaller multifamily properties have grown their share of non-family households. On the other hand, large properties are appealing most to married couples. The share of renters living with roommates continues to rise across all apartment property types.
Despite a slowdown in CRE Collateralized Loan Obligation (CLO) issuance over the last six months, industry participants expect activity to pick up and ultimately result in flat volume of $15B to $17B to end 2019, noted several panelists at IMN‘s 1st Annual Investors’ Conference on CRE CLOs.
The Benefits of Streamlined Rate Lock in an Ever-Changing Interest Rate Environment As we move into 2019, potential risks to economic growth and the possibility of a higher interest rate environment are causing uncertainty among industry stakeholders, including multifamily borrowers. Fannie Mae’s Streamlined Rate Lock (SRL) helps borrowers mitigate the risk of interest rate volatility by providing the ability to rate lock their loan, capitalizing on a rate that could ideally maximize loan proceeds. Download our article to learn: • How Fannie Mae’s SRL can offer peace of mind in an everchanging interest rate environment • Some key benefits of using SRL • Several scenarios in which SRL would be a choice loan solution
