Uneven bond market brings mixed mortgage rates

Real Estate Weekly, Feb 24, 1999

With the bond market waffling, mortgage rates for New York luxury co-ops and condominiums ended mixed in January.

So reports The Manhattan Mortgage Company, a leading specialist in co-op, condominium and private home residential financing, which surveys and analyzes New York mortgage rates and borrower preferences on a monthly basis.

According to its January report, which is based on data from over 30 major lending institutions, all serving the New York residential marketplace, two of the three most popular fixed-rate mortgage products ended lower, while two of the four leading adjustable rate loans climbed higher.

In the fixed-rate category, 30-year fixed-rate mortgages finished at 7 percent (from 7.125 percent), while 10-year and 15-year fixed rates closed at 6.625 percent and 6.25 percent, respectively. They both has started the month at 6.75 percent.

In the adjustable mortgage category, one-year adjustables climbed from 5.5 percent to 5.625 percent; three-year adjustables rose from 6.125 percent to 6.25 percent; five-year adjustables remained at 6.375 percent; and seven-year adjustables dipped to 6.5 percent from 6.625 percent.

According to Melissa Cohn, chairman and CEO of The Manhattan Mortgage Company, "January was a very uneven month and it played out that way in the mortgage marketplace. At the beginning, the bond market rallied, bringing rates down, but by the end Secondly, if work is required, doing the entire building, rather than piecemeal, will save money.

We are also encouraging the boards and owners of buildings we manage to conduct inspections as soon as possible and to have any work done soon after, particularly since inflation is low and prices relatively stable. Also, as usually happens, we anticipate that many buildings will procrastinate in having the inspections, with a rush at the end for inspections and repairs creating a sellers' market with higher costs. With the good economy and financial stability of many properties, buildings are catching up on exterior work that was postponed when cash was tight, causing a run on sidewalk bridges and scaffolding, and possibly higher costs and/or a scarcity of equipment.

One interesting sidelight to the fiscal strength of properties and compliance with Local Law 10 is: as buildings make the needed Local 10 repairs, we are seeing many upgrading the facades and restoring and/or repairing the architectural details that were removed when work was done during periods of tight money. With some buildings putting back the original balustrades and balconies, they are making the buildings more attractive and adding to New York City's fascinating architectural cityscape.