Weekly Interest Rate Overview

The Markets. Rates on home loans were slightly higher again in the past week going into the Fed’s rate decision. Freddie Mac announced that for the week ending December 17, 30-year fixed rates rose to 3.97% from 3.95% the week before. The average for 15-year loans increased slightly to 3.22%. Adjustables were mixed, with the average for one-year adjustables increasing to 2.67% and five-year adjustables remaining at 3.03%. A year ago, 30-year fixed rates were at 3.80%, a bit lower than today’s levels. Attributed to Sean Becketti, chief economist, Freddie Mac –“As was almost-universally expected, the Federal Open Market Committee (FOMC) of the Federal Reserve elected this week to raise short-term interest rates for the first time since 2006. We take the Fed at its word that monetary tightening in 2016 will be gradual, and we expect only a modest increase in longer-term rates. Rates on home loans will tick higher but remain at historically low levels in 2016. Home sales will remain strong, but refinance activity should cool somewhat.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated December 18, 2015

	Daily Value	Monthly Value
	Dec 17	November
6-month Treasury Security	0.48%	0.33%
1-year Treasury Security	0.69%	0.48%
3-year Treasury Security	1.33%	1.20%
5-year Treasury Security	1.73%	1.67%
10-year Treasury Security	2.24%	2.26%
12-month LIBOR		0.868% (Nov)
12-month MTA		0.285% (Nov)
11th District Cost of Funds		0.649% (Oct)
Prime Rate		3.50% (Dec)

November 2015 Manhattan and Brooklyn Sales Market Report

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Manhattan Trends:

• Overall Manhattan contract activity was level compared to last November, but lower than October, which is typical for this time of year.
• Total borough-wide inventory declined 5% month-over-month, and fell 3% since last November.
• Manhattan listings priced below $1 million continued their steady decline during November, and comprised 30% of total properties available.  In contrast, the number of listings priced over $3 million continued to climb.  34% of Manhattan listings during November were priced over $3 million.

 

Brooklyn Trends:

 

• Sales in Brooklyn remained strong, and continued a 17-month streak of year-over-year growth.  Buyers signed 18% more contracts this November compared to last, and sales activity remained steady when compared to October.
• Total Brooklyn inventory declined 3% since October, but increased 4% year-over-year.
• The market-wide median sales price increased 10% since November 2014, and rose 6% since October – to a median price of $950,000.

 

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November 2015 Manhattan Rental Market Report

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• The report found that all metrics used to evaluate the rental market shifted in favor of tenants when compared to the month prior.  Rents fell across the board, the percentage of leases offering a move-in incentive to new tenants increased, and the borough’s vacancy rate climbed to a level not seen since 2009.
• In November 2015, the average monthly rental price for a Manhattan studio was $2,169. For one-bedroom homes, the average was $2,938.  For two-bedrooms, the average rent was $3,904.  Finally, the average three-bedroom apartment rented for $5,216.    
• Average rents saw the largest declines for one- and two-bedroom units when compared to October.  Rents fell 4% for both of these apartment categories.  Average rents for studio units fell 2%, while pricing for three-bedroom homes declined 1% over the same period.
• The borough-wide vacancy rate rose to 2.02% from October’s rate of 1.81%.  This is the highest vacancy rate we have seen in Manhattan in over 6 years.  The last time the rate topped 2% was in April 2009 – when it reached 2.28%.
• When examining concessions, 13% of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants in November, up from 8% in October.

“There is a significant disconnect between owners’ expectations – and tenants’ willingness and ability to pay,” commented Gary Malin, President of Citi Habitats. “The fact that vacancy rates are the highest in the East and West Villages is strong evidence that for apartment seekers, paying high prices for small spaces no longer adds up. With inventory trending upward for the past six months, the party’s been over for quite some time.  Landlords need to react, and it’s going to take rent reductions and additional incentives to move the needle – especially as we enter the holiday season. ”

 

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