Retail Real Estate Recovery Taking Hold: 

Now that residential real estate has bottomed and started to make some gains, commercial real estate is starting to pick up to.  This is very important to your local housing market as a vibrant retail business always supports local housing demand.

Vacancy rates and rents at U.S. neighborhood shopping centers improved for the second quarter in a row, further evidence the sector is moving toward recovery after years of weakness, real estate research firm Reis said on Friday.

The retail real estate sector has been among the hardest hit in commercial property. At the mercy of consumer spending, the sector has reflected the diverse pressures and changes since the housing crisis began in 2007.

The first quarter marked the first time in nearly seven years that average vacancy rates at strip malls fell, and that trend continued in the second quarter, Reis said, with the rate declining to 10.8 percent. While demand for space is weak, the firm said, new construction is even weaker.

At the same time, asking rents rose 0.2 percent, up from a gain of 0.1 percent in the first three months of the year.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) Gained +59 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move lower.

Mortgage backed securities set a new all-time record on Friday.  
Mortgage rates move in the opposite direction of MBS, so mortgage rates set a new record for an all time low.

We had our highest mortgage rates on Monday  and our lowest on Friday afternoon.

We had a holiday-shortened week and MBS traded in a fairly narrow range for much of the week, finding support along our 10 day moving average.

But that all changed on Friday on the much weaker than expected Unemployment data.  While the Unemployment rate remained unchanged at 8.2%, traders and economists focused on the Non-Farm Payroll report.

The entire United States added just 80K new Non-Farm jobs last month which was dismal; this economic weakness caused a big sell off in the stock markets which made bonds, like mortgage backed securities, very attractive to investors as a safe-haven for their funds.  This added demand pushed MBS to a new all-time high.

Brought to you by:

Harold (Hal)
Senior Loan Officer
Office: 800-333-3004 x 3441
Cell: 703-507-1572
hjohnson@embracehomeloans.com

Embrace Home Loans
10306 Eaton Place
Fairfax, VA 22030
NMLS 233808

www.embracehomeloans.com