- Michigan, Rhode Island, Colorado entities borrowed recently
- A 57% year-over-year jump in issuance of such bonds seen
State and local governments borrowed nearly $9 billion for affordable housing so far this year — the most for the period in at least a decade — as buying a home in the US remains expensive.
The Michigan State Housing Development Authority’s recent $425 million bond sale is expected to help more than 2,700 families get lower mortgages, said Chief Financial Officer Jeffrey Sykes. Rhode Island Housing sold about $125 million of non-taxable bonds to aid first-time home buyers. Colorado ski town Telluride borrowed $31.8 million, half of which will be used to buy and build affordable rental housing.
The 57% year-over-year jump in issuance of housing bonds coincides with a period of lower borrowing costs in the muni market. The yield on the 10-year AAA benchmark is down 1.1 percentage point since Nov. 1, the start of a prominent rally. Mortgage rates, meanwhile, continue to be twice as high as they were in 2021, before the Federal Reserve started raising interest rates.
Bloomberg Markets
By Melina Chalkia
March 27, 2024