A record-breaking surge in new apartments is being met with an expected response from lenders – mortgage interest rates are dropping. That’s great news for property owners, renters and anyone looking to buy a home in the near future. With an oversupply of apartments and increasing interest from first-time homebuyers, the apartment market could see some short-term softening, but lenders are predicting that the relief from lower mortgage interest rates will outweigh any potential problems.
As mortgage rates continue to lower, potential homeowners have a great opportunity to purchase a home. Properties such as apartments, townhomes and condos can become quite attractive when mortgage rates drop. An oversupply of apartments, along with lower rates, can also contribute to driving rental costs down, allowing tenants to enjoy lower rental prices and a great selection of properties.
Due to an oversupply of new apartments, there is a high possibility of some short-term softening of the apartment market. This could mean a decrease in the overall value of certain apartments, as well as fewer renters choosing to rent in those areas. But lenders predict the relief from lower mortgage interest rates will more than make up for any temporary losses.
The record surge in new apartment supply is ultimately good news for home buyers and renters alike. Lower mortgage interest rates allow potential homeowners to secure a great deal on their houses, while lower rental costs give tenants more money in their pockets. The apartment market may experience some short-term softening as a result of the current oversupply, but lenders believe the relief from lower mortgage interest rates will far outweigh any potential negative effects.
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