‘Foong on Finance’ with Keat Foong: Low Rates! Hurrah!!

There was news this morning of a new wave of econo...

There was news this morning of a new wave of economic pessimism: exports have fallen and the possibility grows that the 2.4 percent second quarter GDP growth figure could be revised lower.

And the accompanying news was that the yield on the benchmark 10-year Treasury bills had fallen back further, to 2.69 percent. Recently, the yield has been in the 2.90 percent range, and we thought that was low (albeit higher than the low-2 percent levels reached during the depths of the financial crisis in late-2008/early-2009).

Just as I was getting ready to submit a blog today on this subject, I found the news had caught the eye of at least another blogger. A piece was ran late this morning with the title, “The Meaning of 2.71.”

How about it, multifamily? With Fannie and Freddie spreads around 200 basis points for the highest leverage deals, all-in interest rates can be in the 4-5 percent range depending on the transaction, said one lender I spoke to. Low rates like these can generate a lot of cash and additional wealth creation. They can enable more deals to work and/or enable sellers to sell for higher prices?