Real estate development depends heavily on lending liquidity, which spurs new construction projects and thereby creates demand for materials and subcontractor capacity. When conditions are favorable for lenders, therefore, construction volume tends to increase.
We have seen the loan activities of both the residential and commercial real estate markets become more active by the end of 2021. Loans associated with construction and development are beginning to taper off, indicative of a return-to-form across the country. Confidence in the market remains high, even as concerns about inflation, geopolitics, and new variants abound.
30-year mortgages are steadily ratcheting up, as the Federal Reserve pivoted from encouraging spending to reining it in. They should continue to rise, although hopefully not high enough to send the market into recession.