美房贷利率达7.5%致购房低迷，租赁需求与办公市场分化

It's not just mortgage rates, right. That's that's going to impact the residential side. And, and um, you know, it's going to impact borrowing for, for commercial. But it's just rates in general. Right. The ten year yield at five three or wherever it is today. Um that makes cap rates go higher, which brings real estate values lower. It makes it harder to borrow. Um, it makes stocks that have a big dividend component less relatively less attractive.

And that's has been, uh, beating up the sector. Um, for the past, you have really all year, uh, the, the last couple of months especially. So we were just talking about, uh, John Tucker's mortgage, how he has locked in a low rate. But I feel like a lot of people across the country are in this position where maybe they have a lower interest rate and they get like they are locked into it. I mean, how are we seeing home sales affected across the country, and how do we expect to see that change or not change?

Well, I think we're seeing it in, uh, home sales being, uh, diminished. And that is a boon to owners of rental housing. Um, and that's, you know, kind of the angle that I look at is, you know, the owners of apartments and owners of single family homes for rent. Um, theoretically, they should be seeing stronger demand. Right? If you are in if you're in a rental home and you can't buy a home, or if you are, um, you know, kind of trying to figure out what your housing situation is going to be, you just got a job, whatever.

You know, rental is the answer. Um, people are staying in rentals longer, and that should start to drive rent growth higher. We're still optimistic that rent growth is going to accelerate into 2027. Um, you know, the rates will start to report earnings over the next week or two. And, you know, it'll be an interesting signal what the third quarter rents looked like. Because now we head into the kind of the slower leasing season at 14 one Q but what does that mean for kind of heading into next year on the rent growth side for Q1?

Q2 is kind of the seasonally weak period. Is the like high demand period. Still, you know, after the school year ends. I mean it. Does it align with the academic year? Like when? Yeah. How does that shake out when you have rates this high and a lot of the cyclical things kind of falling out of relevance? Yeah. I mean the timing doesn't really change, right? The high demands time for moving is over. The is roughly the summer.

Right. And so that's really when um, you know, if you're if you're a rental landlord, that's when you have most of your leases scheduled to expire. Because that's theoretically when the higher demand is going to be and you can, you know, have better pricing dynamics. Um, uh, you know, people who aren't moving out to buy homes just means there's going to be fewer, theoretically fewer availabilities. Um, to that you need to fill again, should help on the pricing side.

All right. So there's the eternal debate here in New York, but also across the country. Is it better to rent or own right now? Uh, well, but better to rent, um, a form of pricing from a pricing perspective, kind of a rent. We did a study, uh, that we published, um, recently comparing kind of the costs of renting, the cost of owning nationally, and then in a bunch of different markets and the, um, the pricing advantage on rents now, especially with where mortgage rates are.

Huge advantage. I feel so vindicated as a renter. I always feel like this pall of shame. But not today. Not today. You're making a wise financial decision. That's right. So you can pat yourself on. Is she building equity? You know, bring her down. No, I am not building equity. No, not at inflated rates, maybe. But, you know, um, I want to get to office space because you look around here and some buildings have either been vacant for weeks, if not years, and others, um, get snapped up right away.

There seems to be a huge divide between office space that has a lot of demand, and that which can't find anyone. Yeah, there's a huge bifurcation between the top of the market and kind of the overall, uh, everything else. And that's true, you know, cities, New York is, is, you know, the poster child for that. San Francisco is is another one. You have a huge amount of AI and tech tenants that are looking to gobble up space.

There's availability everywhere. They're going to take the top of the market, and then that's going to leave the vacancy at the at the bottom. Um, and you know, what we're seeing in New York is interesting. We've actually started to see some new buildings coming out of the ground, right? People are developing new office space, which doesn't necessarily make sense when overall vacancy is high. But if the demand is for new high end stuff, you need to build new high end stuff.

Is it more expensive to build new high end stuff than to refurbish stuff that maybe it's not so great but could be made great? I mean, you know, you location is the one part that you can't replace, right? So so if you're in the wrong, if it the building's in the wrong spot, then it doesn't matter. Um, and it's not so much that it's more expensive or less expensive. It's just some, some buildings, they just they don't have the bones that are needed to really facilitate what the today's tenants want.

Right? In terms of tech, in terms of, um, uh, you know, energy efficiency in terms of space needs, the way the building's laid out, that kind of thing.