The faltering economy has led to a spike inloan delinquencies, and the problem could deepen in the near term. The delinquency rate on apartment construction loans registered 3.7% in the third quarter, up from 2.9% in the second quarter, according to real estate research firm Foresight Analytics of Oakland, Calif. Delinquencies on commercial construction loans rose from 4.1% to 5.2% during the same period.
What's more, the volume of construction lending on commercial properties rose 4% in the third quarter to $307 billion. Multifamily lending activity also climbed moderately in the third quarter, rising to $47.6 billion from $46.6 billion in the second quarter. The results are based on an analysis of lending activity at FDIC-insuredand thrifts.
The silver lining perhaps is that any expansion of construction activity earlier this year is not likely to continue into the fourth quarter, according to Foresight Analytics.