Lending conditions for residential mortgages remained largely unchanged in most categories, while overall demand weakened in the fourth quarter of 2024, according to the National Association of Home Builders and the Federal Reserve Board’s January 2025 Senior Loan Officer Opinion Survey. Five out of seven residential mortgage categories showed slight easing, with easing index values ranging from +2 to +4, marking the highest number of categories easing since early 2022. Subprime and Non-QM jumbo loans remained negative, indicating tighter conditions. All residential mortgage categories, except Non-QM jumbo, reported at least modestly weaker demand, with subprime loans recording the lowest net percentage at -46% and experiencing weaker demand for 18 consecutive quarters.
For commercial real estate (CRE) loans, construction & development loans had a net easing index of -10, indicating modest tightening, while multifamily loans remained near neutral at -3. Overall, CRE loans have experienced 11 consecutive quarters of tightening conditions. However, the net easing index values in the fourth quarter of 2024 were the closest to neutral since early 2022. Demand for construction & development loans recorded a net percentage of -6%, while multifamily loans reported -5%. Both categories have seen weaker demand for 10 consecutive quarters, though the figures in the fourth quarter were the highest in over two years.
