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U.S. Banks reported weaker loan demand for commercial real estate but stronger loan demand for residential real estate The Federal Reserve reported in it's July 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices

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Federal Reserve July senior loan officer opinion survey Highlights:

  • Banks see a stronger loan demand for residential real estate
  • Banks report weaker loan demand for commercial real estate
  • Banks saw weaker commercial, industrial loan demand

The July 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally corresponds to the second quarter of 2020.

 

For loans to businesses

Respondents to the July survey indicated that, on balance, they tightened their standards and terms on commercial and industrial (C&I) loans to firms of all sizes.2 Banks reported weaker demand for C&I loans from firms of all sizes. Meanwhile, banks tightened standards and reported weaker demand across all three major commercial real estate (CRE) loan categories—construction and land development loans, nonfarm nonresidential loans, and multifamily loans—over the second quarter of 2020.

Fed Loan Survey July 2020 Commercial

For loans to households

banks tightened standards across all categories of residential real estate (RRE) loans and across all three consumer loan categories—credit card loans, auto loans, and other consumer loans—over the second quarter of 2020 on net. Banks reported stronger demand for all categories of RRE loans and weaker demand for all categories of consumer loans.

Banks also responded to a set of special questions inquiring about the current level of lending standards relative to the midpoint of the range over which banks’ standards have varied since 2005. Banks, on balance, reported that their lending standards across all loan categories are currently at the tighter end of the range of standards between 2005 and the present.

Fed Loan Survey July 2020 Domestic

Source: Federal Reserve

From The TradersCommunity News Desk

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