In the first quarter, banks’ real-estate loans, excluding residential single- to four-family homes, yielded 5.4%. That represented a rise of more than 1.7 percentage points over a year earlier. Those residential home-loan yields, by contrast, rose just over 0.6 point from a year earlier, to 3.96%.
Loan to Value
The ratio of money banks lent out compared to property value dropped to 51% LTV this spring, a 30-year low in commercial mortgages.
Home Prices
On a year-over-year basis, the home price index rose 0.7% in March, down from a 2.1% annual rate the prior month. The annual increase was the smallest since May 2012.
Office REITs
Office REIT stock prices posted a 48% decline since the start of 2020. Over that same period, the S&P 500 index is up 37%.
Extended Stay
Extended stay hotels remain an enduring bright spot for a hospitality industry that was rocked by the pandemic. These properties had an occupancy rate of 74.7% last year, significantly higher than overall hotel occupancy in the U.S., which reached 62.6% in 2022.
Share Buybacks
Companies in the Russell 3000 have unveiled plans to buy back more than $600 billion in shares this year, in line with last year’s record pace. In all, they announced $1.27 trillion of share repurchases and completed $1.05 trillion in buybacks in 2022, both all-time highs.
Small Bank CRE
Banks with less than $250 billion in assets account for 29.9% of the nearly $1.5 trillion in commercial real estate debt is maturing by the end of 2025.
SBA Lending
The Federal Reserve’s rate-raising campaign has put a notable crimp in financing for companies with smaller payrolls and valuations. The average rate for a loan from the U.S. Small Business Administration, which historically costs less than a bank loan, has reached double-digits, driving many small firms to borrow less.
Home Prices
The national median existing-home price fell 1.7% in April from a year earlier to $388,800, the biggest year-over-year price decline in eleven years. Median prices were down 6% from a record $413,800 in June.
Office Transactions
The total value of office property bought by investors in the first quarter of this year was $10.7 billion, down 68% from the same period last year.