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I thought I would do a quick one-year look-back on the 10-year yield.  In the graph below, the yield had a steady increase until mid-December.  There were the lovely political disagreements that continue to today as well.  Back in December, there was a feeling that the Affordable Care Act would be repealed, there would be a revamping of the tax code, and the corporate tax rate would be reduced.  And all of this was going to spur GDP.  This would then support increases by the FED in the discount rate.

So now we fast forward to today.  Regardless of where one sits regarding politics, none of the items above have occurred.  It is fairly easy to see that the bond market has stated that they do not see much getting done in Washington.  The 10-year yield has been in a tight range since April (red line at the top and lower blue line at the bottom).

The silver lining in this is that clients can still get financing at historically low rates.  Purchases and refinances continue in both the residential and commercial markets.  Clients with holdings in the stock market have also been enjoying about an average increase of 20% over the last year.  Bubble or no bubble, clients in the Bay Area are feeling wealthier.  And they have enjoyed tremendous equity gains in their existing homes as well.

We might as well enjoy this boom until things change.  That is it for this week.  As always, I welcome any of your strategic financing questions.

See the table below for approximate interest rates.

Type Rate Fixed Term
Apartments 3.625% – 4.460% 3 to 10 year (30 yr amortization)
Commercial 3.955% – 4.760% 3 to 10 year (25 yr amortization)
Construction Call for Rate Call for Rate
SV Commercial Lending