Investors who own apartment mortgages could be excited about the third round of interest rate hikes by the Federal Reserve since December 2015. The back-to-back increases means renters will sit tight as housing costs gradually creep back up. As a leading commercial mortgage broker, Howell Investment Finance in Ames, IA, has its finger on the pulse of the latest buying and selling trends so that potential investors are well informed about financing decisions.

A bump in interest rates tends to trickle down to the costs associated with securing home loans, including mortgage interest rates. One of the outcomes is a stabilization or rise in rental occupancies, which puts apartment mortgage loans on solid ground for the short term.

On the flip side, some renters may want to get a jump on purchasing homes before the Federal Reserve raises interest rates again. Chairman Janet Yellen has signaled more rate hikes are expected by the end of the year. Spring and summer are also traditionally high-volume seasons for home sales compared to the fall and winter seasons.

Geographic location also plays a part in how interest rates may impact apartment mortgages. According to the Federal Reserve, certain major cities such as Houston, New York City and San Francisco have noted sharp declines in vacancies as renters make the shift to home ownership.

Another factor affecting the mortgage landscape is renter income levels. Affluent dwellers traditionally have more housing options and could choose to abandon rental properties for condos or single-family homes.

As the second quarter of 2017 gets underway, it remains to be seen if further rises in interest rates will move renters away from apartments and toward home ownership. Barring any catastrophic scenarios within the commercial real estate market, apartment mortgage investors are expected to see some twists and turns this year.

Howell Investment Finance specializes in securing prime investment properties for their clients. Working with some of the nation’s premier commercial lenders, the firm serves Ames, Des Moines, West Des Moines, Ankeny and Cedar Rapids. To get started on apartment mortgage financing, call (515) 233-8228 to arrange a consultation, or visit the website for extensive information on other investment property and financing opportunities.