Contact Us

    [recaptcha]
    • Home
    • Products
      • Subprime
    • Guidelines
    • Rates
    • Lenders
    • Blog

    Non Qualified Mortgage

    Non Qualified Mortgage Rates, Guidelines, Lenders and Information

    Apartment Constructions Cooling Off

    December 29, 2017 By Chris Hamler


    After the housing collapse of 2008, the rapid pace of apartment building constructions helped catch the demand from individuals and families most affected by the crisis. It went on for years, and effectively so. But fast forward a decade later, it seems like that rental property engine is starting to cool off.

    Click here to check today's mortgage rates.

    The change is projected to hit the multifamily segment first. Meanwhile, homebuilding activity for single-family units are expected to sustain its pace.

    Renting became in vogue in the past few years, thanks to Millennials (who make up a huge chunk of the borrowing market) and their increasing activity in acquiring real estate properties. The trend was also in part fueled by the increase in the prices of single-family properties after it recovered from the crisis. As available inventory became less affordable, more people became inclined to just rent than purchase a home. The demand for rental properties drove builders to ramp up construction.

    The charts below show the current trends in multifamily home constructions and its impact on the economy.

    Source: Census Bureau via Bloomberg

    Source: Census Bureau via Bloomberg

    Setting the record straight, construction of multifamily homes are still increasing, but as the market recovers from the past disaster, builders might need to recalibrate their supply. According to recent data by Dodge Data & Analytics, the number of multifamily starts reached enough to recover 96 percent of the ground lost on the downturn. Comparably, only 45 percent is obtained by single-family starts.

    Find a lender today!
    Experts project that spending on apartment constructions would decline by 8 percent come 2018. If this would indeed happen, it would be the second year in a row that apartment construction spending declined after almost a decade of two-digit increases.

    Here’s a graphical description of how exactly this looks like.

    Source: Dodge Data & Analytics via Bloomberg

    And here’s how rental demand for the past two years looks like.

    Source: Reis via Bloomberg

    Interdependent

    A notable aspect of data science, however, is how one can directly or indirectly influence the trajectory of another market element. For example, as builders see that they need to slow down the pace of apartment constructions, it can affect the price of real estate rental properties which could, in turn, increase the key driver of inflation: shelter costs.

    The recalibrating of supply may also free up labor for the construction of single-family homes which are in more need of attending.

    It’s all a wide network of interconnected elements answering to the law of demand and supply.

    In sync

    This could be another driver that would realize expert projections on loosening inventory next year. If all goes well, this could help ease affordability for the country’s new wave of homebuyers and result in a 7 percent increase in new home sales with the rate of homeownership stabilizing at 63.9 percent.

    As a homebuyer, how would this data influence your decision to purchase or refinance? Should you lock in your rate now, or delay homebuying when more units will be available and home prices will probably be cheaper?

    Click to See the Latest Mortgage Rates»

    Filed Under: Non Qualified Mortgages Tagged With: construction, housing, housing starts, mortgage, multifamily homes, rental, rental properties, renting, single-family homes

    Our Experts Seen On:

    More Non Qualified Mortgage Info

    • How the Length of Your Credit History Affects Your Credit Score
    • Best Mortgages for Purchasing Rental Properties
    • What to Look For When Comparing Mortgage Lenders
    • Follow These Tips to Avoid Costly Home Renovation Mistakes
    • What Are The Biggest Challenges Facing First-time Home Buyers?

    Search

    IMPORTANT MORTGAGE DISCLOSURES:

    When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

    Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

    When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

    Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.

    Copyright © Mortgage.info is not a government agency or a lender. Not affiliated with HUD, FHA, VA, FNMA or GNMA. We work hard to match you with local lenders for the mortgage you inquire about. This is not an offer to lend and we are not affiliated with your current mortgage servicer.

    Contact Us | Terms of Use | Privacy Policy | Media | DMCA Policy | Anti-spam Policy | Unsubscribe

    Mortgage.info

    NMLS ID #1237615 | AZMB #0928735

    8123 South Interport Blvd. Suite A, Englewood, CO 80112