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Worries Over The Next Real Estate Downturn Cause Banks To Step Back On Construction Loans

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]

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