Opinion: why HELOC demand will surge

When the 10-year Treasury yield goes down, it generally signals lower interest rates and increased demand for safe-haven assets like U.S. government bonds. Here’s what typically happens across different areas of the economy and markets: 🔻 Why the 10-Year Treasury Yield Drops Increased demand for bonds: Investors buy Treasuries during uncertain times (e.g., recession fears, geopolitical risk), which drives prices up and yields down. Expectations of lower inflation or interest rates: If the Federal Reserve is expected to cut rates or inflation is cooling, yields tend to fall. Weak economic outlook: Slowing growth or a poor jobs report can trigger a yield decline. 📉 Impacts of a Lower 10-Year Treasury Yield 🏦 1. Mortgage Rates and Loans Mortgage rates (especially 30-year fixed) tend to follow the 10-year Treasury. As yields fall, mortgage rates usually decline, making home loans cheaper. This can stimulate the housing market and refinancing activity. 📈 2. Stock Market Lower yields often boost stock prices, especially growth stocks (like tech), because: Borrowing costs are lower. Future earnings are worth more when discounted at a lower rate. Defensive and interest-sensitive sectors (like utilities and real estate) also benefit. 💰 3. Consumer and Business Borrowing Lower Treasury yields can lead to lower interest rates across the board, including for: Auto loans Credit cards Business loans This can boost consumer spending and business investment. 💵 4. U.S. Dollar Falling yields can make U.S. assets less attractive to foreign investors. This can weaken the dollar, which may help U.S. exporters by making goods cheaper abroad. 🪙 5. Inflation Expectations If the yield is falling due to low inflation expectations, it may indicate deflationary pressure. However, if it's just due to safe-haven buying, it might not reflect inflation at all. ⚠️ Potential Risks A sharp drop in the 10-year yield can signal a recession or loss of confidence in the economy. A flattening or inverted yield curve (when short-term rates are higher than long-term) can be a recession warning. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Resi/commercial Typical 2-3 units over a 1-unit ground-floor commercial space LTV’s up to 75% A mixed-use property is a type of real estate development that combines two or more different uses within a single building or development. The most common combination is residential and commercial — for example, apartments or condos above ground-floor retail or office space. 🔑 Key Characteristics of a Mixed-Use Property: Feature Description Use Types Typically includes residential, commercial, retail, office, and sometimes hospitality or industrial components. Zoning Must be zoned for mixed-use by the local municipality. Layout Different uses are separated vertically (e.g., retail on the bottom, housing on top) or horizontally (different sections of the development). Ownership Can be owned by an individual, company, REIT, or government entity; may be leased or sold as separate units. Financing Considered commercial real estate; underwriting depends on the income mix and proportions of use types. 🏢 Common Mixed-Use Examples: Urban Buildings: Apartments above restaurants or retail stores (like Starbucks or a dry cleaner). Suburban Developments: Townhome communities built around a retail plaza or office park. Live/Work Units: Ground-floor office or retail space with a residence above, often used by entrepreneurs. Transit-Oriented Developments: Mixed-use buildings near train stations or bus hubs. 📊 Benefits of Mixed-Use Properties: Diversified Income Streams (residential + commercial) Increased Foot Traffic for businesses Live-Work-Play Environment appeals to urban dwellers Higher Land Use Efficiency and potentially better returns Encouraged by city planning to reduce sprawl and support sustainability A mixed-use property is a type of real estate development that combines two or more different uses within a single building or development. The most common combination is residential and commercial — for example, apartments or condos above ground-floor retail or office space. 🔑 Key Characteristics of a Mixed-Use Property: Feature Description Use Types Typically includes residential, commercial, retail, office, and sometimes hospitality or industrial components. Zoning Must be zoned for mixed-use by the local municipality. Layout Different uses are separated vertically (e.g., retail on bottom, housing on top) or horizontally (different sections of the development). Ownership Can be owned by an individual, company, REIT, or government entity; may be leased or sold as separate units. Financing Considered commercial real estate; underwriting depends on the income mix and proportions of use types. 🏢 Common Mixed-Use Examples: Urban Buildings: Apartments above restaurants or retail stores (like Starbucks or a dry cleaner). Suburban Developments: Townhome communities built around a retail plaza or office park. Live/Work Units: Ground-floor office or retail space with a residence above, often used by entrepreneurs. Transit-Oriented Developments: Mixed-use buildings near train stations or bus hubs. 📊 Benefits of Mixed-Use Properties: Diversified Income Streams (residential + commercial) Increased Foot Traffic for businesses Live-Work-Play Environment appeals to urban dwellers Higher Land Use Efficiency and potentially better returns Encouraged by city planning to reduce sprawl and support sustainability and 🔑 Key Characteristics of 5–10 Unit Multifamily Properties: Feature Description Number of Units 5 to 10 self-contained rental units, each with a kitchen and bathroom. Zoning Generally zoned as multifamily residential or mixed-use, depending on the area. Financing Category Considered commercial real estate by most lenders (5+ units triggers commercial underwriting). Ownership Typically owned by small investors, partnerships, or LLCs. Management Can be owner-managed or managed by a third-party property manager. 4. Private or Bridge Loans Short-term, higher interest Used for rehabs, quick purchases, or properties that don’t qualify for traditional financing 📊 Why Investors Like 5–10 Unit Multifamily: Easier to manage than large apartment complexes More scalable than single-family rentals Still eligible for economies of scale (one roof, one lawn, multiple rents) Can often house hack (live in one unit, rent the others) Tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329