|Many New High Priced Housing Unit Are Being Built|
Many factors feed into the complicated market that provides a roof over the heads of the American people. Mary Salmonsen writes for multifamilyexecutive.com states that cheap interest rates make for low Cap (capitalization) rates and nationwide, “Mid-/high-rise cap rates declined to 4.8%, and garden apartment cap rates to 5.6%, both historic lows,” she writes. This means developers can build, lease up and flip projects at sky-high valuations based on projections of ever higher rents in coming years. An article in Business Insider warns the US apartment market has become overdeveloped, with supply outpacing demand, especially in the most expensive segment of the market. Most likely if history is any indication many of the resulting loans from this construction will end in default and come back to haunt us in the coming years.
Footnote #2; Another place government policy is leading to problems is when it comes to food stamps or the program known as SNAP.