Bonds have been declining in recent weeks following a 25-basis-point rate cut from the Federal Reserve and expectations of further cuts amid rising concerns over an impending recession. Recession concerns were underscored Wednesday by the inversion of the U.S. and U.K. two- and 10-year yield curves and the fall of 30-year Treasury yields to 2.07%, a record ... READ MORE >
Real Estate
Real estate and the middle market go hand in hand. Developers in commercial, residential and industrial markets provide the economic fuel to transform local economies, building infrastructure that leads to new business and job creation.
Homebuilder confidence indicators rise but still lag 2018
The homebuilder confidence index rose to 65 in July, according to the National Association of Homebuilders, as a dovish Federal Reserve is expected to reduce interest rates later this month and potentially two more times by the end of 2019. But while confidence has increased, homebuilders are still facing headwinds related to land, labor and tariffs, all of ... READ MORE >
Real estate investors hope for the best, prepare for the worst—KAYO conference
"We don’t know.” That was the response of Denise Olsen, managing director at GEM Realty Capital, when asked about where the real estate industry is in the business cycle at the recent KAYO Women’s Private Equity Real Estate Summit in Chicago. The truth is, economic cycles and real estate cycles don’t die of old age. Most of the top industry investors, ... READ MORE >
Cautious builders continue to mute housing supply
Key government housing metrics continue to show year-over-year declines. Housing starts fell 11.2% in May, according to the Commerce Department, while permits declined 3.8%. These numbers strongly imply there will be a fall back toward 1.22 million housing completions on an annualized basis in the coming months. Ultimately the housing shortage is not ... READ MORE >
Tenants score win with NY rent regulations; laws could signal broader U.S. trend
On June 11, New York State lawmakers passed landmark new rent laws designed to protect the rights of tenants. Unlike existing tenant regulations, which expire on June 15, the new package of laws will be permanent. The biggest impact will be on rent-regulated apartments, which include both rent-controlled and rent-stabilized units in New York City, where ... READ MORE >
Homebuilder confidence supported by rise in housing starts
There is good news for the U.S. housing market that saw a rough end to 2018. Domestic housing starts rose 5.7 percent to 1.235 million in April, while permits grew at a more modest 0.5 percent to 1.296 million. The growth was primarily driven in the Northeast and Midwest—drying out after a wet and soggy start to the 2019 building season—with month-over-month ... READ MORE >
Key construction index shows improvement, but builder cost hurdles remain
The National Association of Homebuilders’ Housing Market Index rose 3 points to 66 in May—a seven month high—helped by lower mortgage rates and improved sales of new homes. The increase added momentum to this year’s upward trend following a low at the end of 2018. A reading above 50 indicates more builders see conditions as good than poor. While stable ... READ MORE >
Time to get real on GDP and gasoline prices–read The Real Economy
In this issue of The Real Economy, RSM Chief Economist Joe Brusuelas reviews leading indicators of economic activity as the United States heads into the late innings of this current business cycle. He also examines the impact of rising gasoline prices, which are pinching consumers' wallets just in time for the holiday driving season. And our new ... READ MORE >
Government offers further clarity in opportunity zone regulations
The U.S. Department of the Treasury released its latest set of regulatory guidelines on opportunity zones on Wednesday, offering significantly more clarity about the program, which provides tax incentives to developers entering geographic areas slated for improvement. Real estate investors appear to be getting everything they want from the program. The ... READ MORE >
Low interest rates alone can’t save the housing market
The government reported on Tuesday that December housing starts fell 11.2 percent—their lowest level in two years. Despite this, many remain hopeful of a bounce back by spring. We believe that optimism should be kept in check, as high home prices remain a drag on the market. The Commerce Department said new starts in the month slid to a seasonally ... READ MORE >