The outlook is ugly, and the numbers are even uglier. A new paper from four economists at the National Bureau of Economic Research argues that 14 percent of the $2.7 trillion commercial real estate loan market — and 44 percent of office loans — currently carry outstanding loan balances higher than property values and are
More office space is currently sitting empty in the United States than at any point since 1979, said Moody’s Analytics, which began tracking office leasing vacancies that year. The surplus of office space is mainly due to the massive shift in how employees show up for their jobs following the COVID-19 pandemic. For many workers,
The troubled commercial real estate market is bracing for a record amount of maturing loans, boosting the prospect of a surge in defaults as property owners are forced to refinance at higher rates. In 2023, $541 billion in debt backed by office buildings, hotels, apartments and other types of commercial real estate came due, the
Fewer US existing homes are selling today than at any point since 2010. The 3.78 million annual rate from December was even below the lowest level of sales during the 2020 covid shutdowns (4.01 million). The 4.09 million existing homes sold during 2023 was the lowest activity we’ve seen since 1995. Why are home sales
The Trepp CMBS Delinquency rate moved higher again in October 2023, but there were a lot of moving pieces in the latest report. Overall, the delinquency rate rose 24 basis points in October to 4.63%. That is the highest reading since the end of the COVID-19 pandemic. However, one large industrial delinquency influenced the numbers
Getting on the property ladder has rarely been tougher for first-time buyers. But a tight housing market isn’t turning out to be a bonanza for landlords either. The cost of buying a home versus renting one is at its most extreme since at least 1996. The average monthly new mortgage payment is 52% higher than
Mortgage demand is now down 50% from pre-pandemic levels and at its lowest level since 1994. From its peak in 2021, mortgage demand is down ~64%. Current mortgage demand is ~75% below the 2005 peak. The most incredible part of this? Mortgage rates are still only at their historical average. Housing market activity is coming
Delinquent commercial real estate loans at U.S. banks have hit their highest level in a decade, as higher interest rates, an uncertain economy and the rise of remote working pile pressure on building owners. The volume of past-due loans in which owners of properties rented to others have missed more than one payment jumped 30
In terms of commercial real estate (“CRE”), we show exposure to this category as a percent of total loans. We then show “Office” and “Multifamily” as CRE subsectors. Continue reading here.