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Banks Are Stepping Back On Construction Loans

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Development pipelines are expanding and construction lending is on the rise, but banks are becoming more selective when doling out capital.

Commercial and multifamily construction loan volume jumped 14.3% from a year ago, but banks are beginning to lose their appetite for construction lending, National Real Estate Investor reports. Part of the reason for the funding pullback is concerns of a coming downturn, along with worries that new supply in certain markets will outstrip demand.

And the numbers reflect these growing hesitations—over the last nine months banks have pulled back 5-10% on loan amounts. [NREI]