Government bailout boosts mortgages

The Mortgage Bankers Association has released its Weekly Mortgage Applications Survey for the week ending Sept. 12. The Market Composite Index, a measure of mortgage loan application volume, was 661.7, an increase of 33.4 percent on a seasonally adjusted basis from 496.2 one week earlier.

“The drop in mortgage rates reflected the Treasury’s announcement that Fannie Mae and Freddie Mac were placed under conservatorship of the Federal Housing Finance Agency,” said Orawin Velz, MBA’s associate vice president of economic forecasting.

The Refinance Index increased 88.1 percent to 2,300 from the previous week.

Investors group hosting picnic

The Chattanooga Real Estate Investors Association will have a family picnic on Oct. 11 at 3 p.m.

The picnic will be at the Stevens Estate in Ringgold. RSVP to Pat Stevens by Oct. 4 at (423) 619-1516.

Credit crunch hits commercial deals

Lawrence Yun, National Association of Realtors chief economist, said that problems on Wall Street are affecting commercial real estate, including demand for office and retail space.

“Although capital remains available for residential loans, the credit crunch is pronounced in commercial lending,” he said.

This year’s erosion in the job market has slowed demand for office space. Office vacancy rates are expected to increase to 14.4 percent in the second quarter of 2009 from 12.9 percent in the second quarter of this year. Annual rent growth in the office sector should be 3.2 percent this year before contracting 0.4 percent in 2009; it rose 8 percent last year.

Net absorption of office space in 57 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, is projected at 14.7 million square feet this year and 10.9 million in 2009, down sharply from 57.3 million square feet last year.

“Sluggish consumer spending over the next 12 to 18 months will force retail rent growth to turn negative in 2009,” Yun said.

Vacancy rates in the retail sector are expected to be 10.4 percent in the second quarter of 2009, up from 9.7 percent in the second quarter of this year. Average retail rent is estimated to grow 1.2 percent in 2008 and then decline by 0.9 percent in 2009, compared with a 3.2 percent increase last year.

Comments