Commercial real estate investors in the U.S. are feeling more confident this week after the Federal Reserves' fourth interest rate hike in 2018, according to global real estate consultant CBRE.
CBRE's Chairman, Americas Research and Senior Economic Advisor Spencer Levy explains the impact of yesterday's rise in the 10-year Treasury on commercial real estate investment activity with the following comments:
"The outlook for cap rates in 2019 remains favorable, as debt and equity markets are highly liquid and commercial real estate fundamentals are good (retail, office, multifamily) to strong (industrial). The Fed's softening outlook should give confidence to investors, despite strong but slowing rent growth.
"Notwithstanding some late cycle concerns, the volatility in the stock and bond markets makes commercial real estate even more attractive as a long-term capital strategy and we expect the spread between bonds and cap rates to further compress if this volatility persists. As investors seek yield, U.S. commercial real estate will remain an attractive place to deploy capital."
The Federal Reserve cut its federal funds rate today by 25 basis points (bps) to a range of 2.0% to 2.25%. This cut represents a marked change in the direction of monetary policy in the first half of 2019.
Marking the one-year anniversary of the White House executive order on workforce development this week, Greg Ugalde, chairman of the National Association of Home Builders issued the following statement
Existing-home sales in the U.S. weakened in June 2019, as total sales saw a small decline after a previous month of gains. While two of the four major U.S. regions recorded minor sales jumps, the other two - the South and the West - experienced greater declines last month.
According to Freddie Mac's latest Primary Mortgage Market Survey, after declining for most of 2019, U.S. mortgage rates remained mostly unchanged this first week of July. The recent stabilization in mortgage rates reflects modestly improving U.S. economic data.
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