In the News Presented by Prairie Title
Commentary by Frank Pellegrini, Prairie Title CEO
January 25, 2016
Winter is here in full force, the stock market is gyrating and we’re in the midst of an annual lull in the real estate business. So why be optimistic? Two reasons:
1) Home buying season is just around the corner!
2) Commercial real estate is in good shape for 2016 and the years beyond.
On the housing front, while it’s true that things are a bit slow for the moment, as is typical in January (complicated this year by TRID implementation), the trends look promising. As reported by the MBA, total mortgage application activity — for refinancings and home purchases combined — posted strong numbers the last three weeks, climbing 21.3 percent on a seasonally adjusted basis the week ending Jan. 8, and a further 9 percent following week.
“The good news for the new year is that following the holidays, application activity resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off,” noted Lynn Fisher, the MBA’s vice president of research and economics. Meanwhile Interest rates have trended lower the last two weeks, also a good sign that activity is poised to pick up.
Commercial: Last month, Congress passed a tax bill that includes a number of provisions favorable to commercial real estate, including one that analysts say could spur some $30 billion in annual foreign investment in U.S. commercial real estate starting this year. The provision eases 1980s tax requirements imposed on foreign investors to curb their appetite for U.S. commercial real estate.
Meanwhile, the Daily Real Estate News reported on Jan. 14: “Over the next three years, developers are expected to construct nearly 1 million apartments nationwide, hoping to snag wider profits from soaring rents.”
Need another reason for optimism? Baseball’s Spring Training starts in less than a month.
Let’s keep the discussion going. Call me, email me, or post a comment.
Other stories we’re following:
Chicago Housing Market saw Solid 2015 Improvement.
Home Construction up Last Year.
Big Banks Pulling Back from Mortgages.
Cybercriminals Targeting Mortgage Industry.