The share of federally insured depository institutions with an outstanding amount of multifamily residential debt on their balance sheet has risen while the amount of debt outstanding has remained stable, according to an analysis of bank-level call report data provided by the Federal Financial Institutions Examination Council (FFIEC) and reported by Michael Neal for the National Association of Home Builder’s Eye on Housing blog.
In contrast, the proportion of banks with any outstanding amount of 1-4 family first-lien mortgages on their balance sheet has remained steady and fluctuations have occurred in the outstanding amount of 1-4 family first-lien mortgage debt. However, in recent years, growth in the share of banks with outstanding multifamily residential mortgage debt outstanding rose more slowly than the growth in the outstanding amount of multifamily residential debt.
Also, lending standards on multifamily residential mortgages continue to show signs of tightening and the pace at which it’s tightening is growing, according to the most recent Senior Loan Officer Opinion Survey (SLOOS).
Senior loan officers at large banks were asked to give their opinions on changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months. Of bank respondents, 44.3% indicated that lending standards at their bank had tightened over the second quarter.
The net share of banks reporting that standards on multifamily residential mortgages had tightened has widened over the past year. The net share represents the difference between the percentage of banks indicated that standards had tightened and the proportion responding that standards had eased. A net share of 2.9% of banks reported standards had eased in the second quarter of 2015, but in the third quarter, a net percentage of 7.4% of banks reported having tightened standards. The net portion of banks tightening standards on multifamily residential debt rose in the three successive quarters.