Morning Briefing: Continued growth for condo, apartment market

by Steve Randall24 Feb 2017

Continued growth for condo, apartment market
Builders remain confident in the market for new condos and apartments with both market-rate rental units and ‘for sale’ units showing increased sentiment.

The Multifamily Production Index from the National Association of Home Builders was higher overall this month and chief economist Robert Dietz says he expects good things for the next 12 months.

“Given the recent strength of multifamily starts and permits numbers, it is not surprising that multifamily developer sentiment remains positive,” said Dietz. “Our current forecast calls for multifamily production to stabilize at a solid rate and stay there through 2018.”

Dan Markson, senior vice president of The NRP Group in San Antonio, Texas, and chairman of NAHB’s Multifamily Council said that sentiment is positive on increased demand but “regulatory burdens remain a challenge to the industry, which affect developers’ ability to meet this demand.”

Mortgage rates hold steady
The average rate for a 30-year fixed-rate mortgage held steady at 4.16 per cent this week, up slightly from 4.15 per cent a week ago.

"In a short week following Presidents Day, the 10-year Treasury yield fell about 8 basis points,” said Freddie’s chief economist Sean Becketti. However, the 30-year mortgage rate rose 1 basis point to 4.16 percent. This week's survey once again displays the disconnect between mortgage rates and Treasury yields, a result of continued uncertainty.”

Meanwhile the average 15-year FRM was up to 3.37 per cent from 3.35 per cent and the average 5-year ARM was down slightly to 3.16 per cent, from 3.18 per cent.

New York state sets new sales record, Maine sales up 8 per cent
Realtors in New York state have reported a record number of sales during January with 8,472 closed sales, the best January ever and up 4.1 per cent from a year earlier.

“Homebuyer demand remained strong at the start of the New Year, continuing the four-year sales growth trend and driving January sales to a new record level,” said Duncan R. MacKenzie, CEO of the New York State Association of Realtors. “Historically, home sales are slower during the winter months.”

Prices increased 8.7 per cent to a median $250,000 as inventory tightened to 5.3 months’ supply, down from 7.2 months in January 2016. That’s a drop of 26.4 per cent.

“We believe the combination of rising mortgage rates and the continued decline in the number of homes available has caused buyers to remain actively engaged in the market and ready to make offers when they find the home that meets their needs,” added MacKenzie.

Meanwhile, sales of existing single-family homes in Maine increased almost 8 per cent in the year to January 2016, Maine Association of Realtors reports. There were 959 homes sold with a median sales price of $190,000, a rise of 8.26 per cent from a year earlier.

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