Monday, June 8, 2009

May 2009 Market Watch

The month of May continued a steady increase in the 10-year Treasury yield. Since January 1, we have seen an increase of over 150 basis points, closing the month of May at nearly 3.75%. The 10-year Treasury note climbed over 50 basis points in the month of May alone. We have seen lenders adjust their pricing slightly upward as a result of the increase in Treasury rates, but overall, interest rates are still at or near historic lows. For well located and performing commercial real estate, we have the ability to deliver extremely attractive financing options even in today’s challenging market conditions.

NBS Financial prides itself on our correspondent relationships with Life Insurance Company lenders and a select group of local and national bank relationships as well as our DUS (Fannie, Freddie, & HUD) relationships. We have the ability to finance the entire capital stack, from a 1st mortgage to a mezzanine loan. Our sources of money have both confidence in our market and our people to find the best investments for their money. Call one of our Loan Officers today to discuss your next commercial real estate transaction.

May 2009 Treasury Highlights:
• May 10 - Year Treasury High: 3.72% on May 27
• May 10 - Year Treasury Low: 3.09% on May 14

Issues Affecting Commercial Mortgage Rates:
• $145 Billion of US Treasuries auctioned in the last 2 weeks of May, forcing Treasury yields upward of 50 basis points for the month
• FMOC released meeting minutes stating some signs of stabilizing in the economy but "significant downside risks to the economic outlook"
• A steepened yield curve resulting from LIBOR falling and long-term Treasury rates increasing, many expect this should provide a stimulus to the economy
• Fed continues to purchase Treasuries to try and curb inflation that is expected to affect long-term rates as the economy rebounds

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