Commercial Real Estate Lending Growth Remains Strong Despite Fed Rate Hikes

by Chris Hooley on 6/5/2017 in commercial real estate

Although the Federal Reserve’s ongoing interest rate hike has slowed loan growth in some markets, the Commercial Real Estate market remains strong in Q1 of 2017.

The continued strong and steady growth of the Commercial Real Estate Market is due to many factors including the 10-year treasury rate. As the below Forbes article points out, CRE loans are shorter term loans (which are indirectly tied to the 10-year treasury rates). Because the Federal Reserve only adjusts the short-term lending rates the 10-year treasury rate is not immediately impacted by the Federal Reserve Interest Rate adjustments. Therefore, as the article below demonstrates, we should continue to see strong growth in 2017, but will likely see a slowing of growth as the 10-year treasury adjusts to accommodate the reactions to the Federal Reserve short term interest rate hikes.