Hard to imagine that graduation events are behind us and summer holiday plans are in full swing. The significant element for the country is that the US economy keeps chugging along. Even though economists can interpret minor signs of slowing, the macro picture remains broadly positive. The elephant in the room is when Chairman Powell and the Federal Reserve will feel comfortable enough to start reducing rates. Our feeling is that the Fed wants to cut, but pulling the trigger requires more quantifiable information, such as weaker employment and declining retail and housing sales, to move the needle closer to the Fed’s target rate in the low 2’s.
The real estate market has remained buoyant through the first half of the year. Purchase volume is considerably less after the initial thrust at the beginning of the year when rates were briefly in the high 5% area, but there is still a fair amount of activity and prices have remained sticky with minimal retraction. Rates have been slowly declining, and we are hopeful that with a Fed cut in the next month or two, rates will migrate back into the high 5% range, creating stronger demand at all price points.
A brief update on important lending areas
- 80% LTV up to $5,000,000
- 85% LTV up to $2,500,000
- 90% LTV up to $2,000,000
- 96.5% LTV up to $1,149,825
- Conventional 4-unit loans up to $2,163,000
- Conventional 3-unit loans up to $1,741,000
- Conventional 2-unit loans up to $1,440,450
We also have a wide array of reverse-mortgage products that have become much more user-friendly. One in particular is a 2nd mortgage at 9.99% with no prepayment penalty, an excellent vehicle for retirement-age clients or borrowers seeking to raise cash without monthly payments. We are also very knowledgeable in the commercial and apartment loan space, where many borrowers have loans adjusting or maturing.
We feel now is an important time to position real estate activity for potential year-end interest-rate cuts, which historically fuel the purchase market. Stay tuned!