We’ve been waiting on the GDP report since the last quarterly numbers to see if in fact the economy is on a growth spurt and the Q1 reading was more of an anomaly than an indicator. Previously, 

Real Estate Investing

Q1 GDP was revised downward from 1.1 percent to 0.8. Today, the Commerce Department reported Q2 GDP came in much weaker than expect at 1.2 percent. It does indeed appear the economy is slowing down. So what does that mean for real estate and private note investors?

For one, the likelihood of any rate increase by the Fed this year pretty much went out the window. There were some who thought perhaps a December rate bump would happen but now it appears the Fed’s hands are tied. Raising rates now while the economy appears to be losing any sort of steam it previously had would most likely hurt any economic growth. For real estate investors, this means acquisition and financing costs should remain low. And whoever the next President is, that individual might very well be heading into an economy going in the wrong direction.

You may also have noticed yesterday a report yesterday released by the Census Bureau regarding home ownership. While home ownership hit its zenith back in 2005, it has plummeted since then. Initially due to the restrictive lending guidelines put in place after the housing crisis but now it appears that consumers would rather rent than own. According to the data, home ownership is now at its lowest point ever, matching the 1965 rate of 62.9 percent. When there are more renters than owners we can expect rental rates to continue their march upward and developers are trying to keep up with the trend.