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Saturday, April 5, 2025
Friday, April 4, 2025
BMO Capital cuts AvalonBay stock rating, targets $220 price
BMO Capital Markets adjusted its stance on AvalonBay Communities (NYSE:AVB), downgrading the real estate investment trust’s stock rating from Outperform to Market Perform. The firm also set a price target for AvalonBay shares at $220.00, while other analysts maintain targets ranging up to $265. According to InvestingPro data, AVB currently trades at $205.86 with a market capitalization of $29.25 billion.
The downgrade comes as BMO Capital anticipates increased development costs and softened demand for AvalonBay, a company recognized for its high-quality residential properties and its 32-year track record of consistent dividend payments, currently yielding 3.4%. The expected challenges are partly attributed to reductions in DOGE allocations within the company’s primary market. InvestingPro analysis indicates the stock is trading above its Fair Value, with a P/E ratio of 27.11x relative to its near-term earnings growth.
In a statement released by BMO Capital, the firm noted, "We downgrade AvalonBay to Market Perform with a $220 target price. AVB is a blue-chip company, but we believe will likely face higher costs for its developments, and weaker demand due to DOGE cuts in its home market." This adjustment reflects a shift in the firm’s expectations regarding the company’s near-term performance.
Investors seeking more detailed insights into the rationale behind the downgrade and the price target are directed to BMO Capital’s first-quarter 2025 Apartment/Residential update. The report is expected to provide a comprehensive analysis of the factors influencing the firm’s outlook on AvalonBay.
AvalonBay Communities, known for its portfolio of upscale apartment homes, is navigating a changing economic landscape that impacts both the cost of property development and consumer demand. BMO Capital’s latest assessment suggests a more cautious view of the company’s prospects in light of these market dynamics.
Thursday, April 3, 2025
Monthly mortgage payments soar to record high
A typical monthly housing payment hit a record high of $2,807 during the last four weeks ending March 23, according to a study by Redfin.
The 5.3% increase is a result of the average cost of home prices going up roughly 3% annually and mortgage rates sitting at 6.6%.
“Buyers are cautious because they’re worried about the economy and potential layoffs, and they’re wondering if mortgage rates will come down later this year. But because other buyers are cautious too, some house hunters are getting homes for under asking price,” said Kimberly Freutel, a Redfin Premier agent in Sammamish, Washington.
The realtor suggested potential buyers stay within their comfort zone when making a purchase offer.
“If you love a home and you see yourself living there for at least four or five years, make an offer you’re comfortable with, even if it’s a little below list,” said Freutel. “Don’t assume it will escalate out of your price range, because the seller might actually take it. I’m asking my clients, ‘Would you be sad if this home ends up selling for less than asking price to someone else?’”
The average rate on a 30-year mortgage in the U.S. fell slightly last week, a welcome reversal for homebuyers in what’s traditionally the housing market’s busiest time of the year.
The rate fell to 6.65% from 6.67% the previous week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.79%.
This is the first decline in the average rate after rising two weeks in a row. The average rate has trended lower since mid-January, when it climbed to just over 7% — a relief for house hunters struggling to afford a home after years of soaring prices.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, rose last week, however, pushing the average rate to 5.89% from 5.83% the previous week. A year ago, it averaged 6.11%, Freddie Mac said.
https://finance.yahoo.com/news/monthly-mortgage-payments-soar-record-153502946.html
Wednesday, April 2, 2025
LA’s Mansion Tax Crimps Multifamily Housing, Taxes, Study Says
Housing construction and tax revenue in the city of Los Angeles are being hurt by a voter-approved levy on high-priced property sales, according to researchers at the University of California at Los Angeles.
The tax on high-value properties, including multi-unit buildings, has caused a 50% drop in sales above the $5 million threshold, researchers at the Luskin School of Public Affairs estimate.
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