Mortgage Rates Slide 21bps Ahead of Tuesday CPI Print

Closing is the final step in a real estate transaction where ownership officially transfers from seller to buyer — documents are signed, funds are wired, the deed is recorded, and you walk away with the keys.

Cost of capital is the weighted average rate of return that a real estate investment must generate to satisfy all capital providers—debt and equity—calculated by blending each source's required return proportional to its share of the total capitalization.

An Employer Identification Number (EIN) is a nine-digit federal tax ID assigned by the IRS to identify a business entity for tax and banking purposes.

Freddie Mac (Federal Home Loan Mortgage Corporation, FHLMC) is a government-sponsored enterprise (GSE) that purchases mortgages from lenders, packages them into securities, and sells them to investors. Along with Fannie Mae, it supports the conventional mortgage market for 1–4 unit residential properties.

APR (Annual Percentage Rate) is the total annualized cost of a loan expressed as a percentage, incorporating both the interest rate and lender fees — origination charges, discount points, broker fees — spread across the full loan term. Mandated by the Truth in Lending Act, it gives borrowers a standardized number that's always higher than or equal to the stated interest rate.

A basis point (BP or BPS) is one-hundredth of one percentage point — 0.01% or 0.0001 in decimal form — used as a precise unit of measurement for interest rates, yields, spreads, and other financial figures where small changes carry large consequences.

The interest rate the U.S. government pays investors who lend it money by buying Treasury bonds. The 10-year Treasury yield is the most watched rate in real estate because 30-year fixed mortgage rates typically run 150–200 basis points above it.

A spread is the numerical difference between two rates or yields — most commonly the gap between real estate cap rates and 10-year Treasury yields, or between mortgage rates and benchmark interest rates. Investors read spreads as a signal of whether real estate is attractively priced, fairly valued, or dangerously expensive relative to risk-free alternatives.

A survey is a professional measurement and mapping of a property's legal boundaries, easements, encroachments, and physical improvements, prepared by a licensed land surveyor.

The Consumer Price Index (CPI) measures the average change in prices paid by urban consumers for a fixed basket of goods and services — including housing, food, transportation, and medical care — over time. It is the most widely used gauge of inflation in the United States, published monthly by the Bureau of Labor Statistics.

Yield is the annual income an investment generates expressed as a percentage of its cost or current market value. In real estate, it answers the single most useful question at the analysis stage: how much does this asset pay me each year relative to what I put in?

The mortgage rate is the interest rate charged on a real estate loan—typically the 30-year fixed rate for residential—driven by federal-funds-rate, yield-curve, and interest-rate-cycle, affecting leverage, DSCR, and cap-rate.

The Consumer Price Index (CPI) is a Bureau of Labor Statistics measure of the average change in prices paid by urban consumers for a basket of goods and services—the primary gauge of inflation-rate used by the federal-reserve for monetary policy.

The Federal Reserve is the United States' central bank, responsible for setting monetary policy — including the federal funds rate that directly influences mortgage rates and real estate market conditions.

A lender is a bank, credit union, or mortgage company that provides financing—a mortgage—for real estate purchases.

A mortgage is a loan used to purchase real estate, with the property serving as collateral—if you stop paying, the lender can foreclose and sell the property to recover their money.

Equity is the portion of a property's value you own outright—the property's value minus any loans secured against it.