🏠 Treasury Yield Updates 5-Yr UST Yield: 3.765% 10-Yr UST Yield: 4.218% Why is this important? - Amid the stock market selloff, faith in the US economy is still strong in the eyes of investors. The 5 & 10 year US - treasuries have had no significant movement in the last two weeks. This is significant because as treasury yields fall, the economic outlook is more worrisome. - Typically for every 20 basis point swing, rates will move 1/8th in the corresponding direction. In the last week rates have held steady with no real movement in any direction. 📈 Industry Headlines • To Utah We Go!!!: Young buyers are beginning to look in smaller pockets of the United States for home ownership. Provo Utah is one of those places. An interesting read for those who are not tied down to where they currently rent/own. •10 Predictions for Builders and Landlords: An opinion based article with some optimistic ideas on rates, prices, and rent growth 📘 What You Should Know (Opinion) I believe we are at a point in time where we will see an increase in home sales, lower interest rates, and a continued surplus of homes. Though, the first time buyers group will continue to be marginalized.

Debt-Service Coverage Ratio - DSCR - DSCR measures how much income a property produces compared to its debt payments - Lenders use DSCR to determine whether rental income can support the loan - It is also a measure investors should be familiar with to help with early deal valuations 🏠 Scenario: An investor buying a 4-unit property with projected rents of $6,000/month and a mortgage payment of $5,000/month - Rental Income by unit: ($6,000/4) = $1500 per unit - Monthly Mortgage: = $5,000 between... PITIA - Principal Mortgage Payment - Interest - Taxes - Insurance - Association Fees In this scenario we see a DSCR of 1.20 - ($6,0000/$5,000) - 1.20 Deal will qualify for most DSCR programs - 1.00 & below options become limited and pricing increases (The property also isn't cash flowing appropriately)

🏠 Treasury Yield Updates 5-Yr UST Yield: 3.842% 10-Yr UST Yield: 4.268% Why is this important? - Treasury yields don’t set private lending rates but they set the minimum return expectations for capital. It is important to understand that there is a reason rates are where they are. - Typically for every 20 basis point swing, rates will move 1/8th in the corresponding direction. In the last week rates have held steady with no real movement in any direction. 📈 Industry Headlines • Home Buyers Finally Catch a Break : The discount for buyers continues! The average discount homes sold for below listing price was around 8%. • Rent-To-Own: High amount of unsold inventory (houses), builders have introduced an idea to have renters pay above market rent to escrow money to be used as a down payment on the home they are renting. 📘 What You Should Know (Opinion) Though we are seeing a discount among sales for buyers, we are also seeing a large majority of the buyers market being excluded from transactions solely due to the high starting price of these homes. When the price starts high, a whole group is ultimately excluded from the market which in turn creates a housing surplus of high priced homes. This is what gives that smaller group of buyers bargaining power.

Why Mortgage Rates Follow the 5-Year & 10 Year U.S. Treasuries (Not the Fed) - Many people assume mortgage rates move when the Fed cuts or hikes rates. In reality, mortgage rates are more closely tied to the 5-Year U.S. Treasury as well as the 10-Year U.S. Treasury Here’s why: - Mortgage-backed securities (MBS) compete with 5 & 10-Year Treasuries for investor money. When the 5 or 10-Year yield rises, investors demand higher returns on mortgages and this pushes mortgage rates up. When it falls, mortgage rates usually follow. How this shows up today: - Even when the Fed signals rate cuts, mortgage rates may stay elevated if the 5 & 10-Year Treasury remains high. Borrower takeaway: - If you’re watching rates, track the 5 & 10-Year Treasuries not just Fed headlines. 💬 Was this new information to you?

🏠 Treasury Yield Updates 5-Yr UST Yield: 3.835% 10-Yr UST Yield: 4.271% Why is this important? - Amid all the market, geo-political, and at home instability, the treasury rates have held steady implying that the investor/lender space is still the place to be.  - Typically for every 20 basis point swing, rates will move 1/8th in the corresponding direction.  - 📈 Industry Headlines • Housing Market is Swinging Toward Buyers: Buyers are purchasing at discounts! On top of that buyers are also securing concessions from sellers, these concessions can be put towards closing costs. • 4 Ways to Add Real Estate to Your Asset Mix: Option 4 goes into detail on the pros, cons, risks, and gains of expanding your real estate portfolio. “The appeal of direct holding is the asset appreciation plus potential cash flow” 📘 What You Should Know (Opinion) Market variability is always scary, but assets that stand the test of that variability over the long run and act as hedges to inflation and a struggling market are real estate investments. No single asset is immune to volatility which is why diversification is uber important.