B2R Investor Intel: The Grexit
In what is playing out to be a Greek tragedy not seen by many of us since high school, turmoil continues to roil oversees. With drama surrounding a potential Grexit somewhat mitigated by new economic proposals today, China’s impending 1929, and Puerto Rico needing a bankruptcy lifeline, investors are fleeing to safety in the U.S. bond market. This, in turn, is bringing down mortgage rates, according to data released Thursday by Freddie Mac. The tumult weighed heavily on Federal Reserve officials when they gathered at their June 16-17th policy meeting, minutes revealed Wednesday. Despite signs of economic progress and rates expected to rise as early as September, the Fed is still treading carefully with respect to raising the federal funds rate.
With so much turmoil overseas, demand in May for U.S. exports fell $1.5 billion, or 0.8 percent, the Commerce Department reported Tuesday. The good news is, the trade gap only grew $1.2 billion to $41.9 billion, less than the $42.6 billion total deficit expected by analysts, suggesting Wall Street economists may slightly raise their forecasts for economic growth in the second quarter. See, not all bad.
In what will certainly be welcome news, the number of job openings across the country rose in May for a second record-setting month, according to data released Tuesday by the Labor Department. The report showed the country’s labor market posting nearly 5.4 million open positions in May, up slightly from April’s 5.3 million, which had previously held the record for being the highest in the almost 15-year history of the data series. More than 2 million positions were open in the South, while only 821,000 open positions were posted in the Northeast.
These past few years of low rates have fueled a buying spree, resulting in increased home prices. Including distressed sales, home prices nationwide increased by 6.3 percent in May 2015 compared with May 2014, according to the home price report from CoreLogic. The five states with the highest home price appreciation (including distressed sales) were: South Carolina (+10.3 percent), Colorado (+9.8 percent), Washington (+8.8 percent), Florida (+8.7 percent) and Nevada (+8.3 percent). This has a record-setting 59 percent of American consumers expecting property rental prices to go up, according to Fannie Mae’s June 2015 National Housing Survey.
Finally, a report released Thursday from RealtyTrac on the best markets for buying and renting properties found some eye popping rental yields across America. Three-bedroom properties purchased in the first few months of 2015 in Clayton County, Georgia in the Atlanta metro area will potentially produce 24.05 percent annual gross rental yield, with the following counties also raking it in: Bay County, Michigan (19.23 percent), Mahoning County, Ohio (19.04 percent), Bibb County, Georgia (18.11 percent), and Philadelphia County, Pennsylvania (17.67 percent). Stay tuned for our detailed report on this study coming out in our newsletter on July 28th.
Overall a happy ending to an unpredictable week for rental property investors.
B2R Finance offers rental investors innovative lending products to help unlock equity from existing portfolios and provide the cash needed to build rental portfolios nationwide. For more information about how B2R can help you obtain rental property financing, just call 800-227-8107 or visit www.b2rfinance.com/borrowers and follow us on Twitter @B2RFinance.
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