Commercial real estate lending by banks, insurance companies and other financial institutions is declining as sales activity slows and regulators voice concern about the sector, the Wall Street Journal reported today. Lenders closed roughly $491 billion of mortgage loans in 2016, down 3 percent from 2015, according to new statistics from the Mortgage Bankers Association. Most of the decline occurred in the fourth quarter, when volume was 7 percent lower than the same quarter in 2015, according to Jamie Woodwell, the trade group’s head of commercial property research. Despite the decrease, the new volume number was the third highest since the association began doing the survey, behind 2015 and the record year of 2007. The decline between 2015 and 2016 was due partly to a slowing of property sales, meaning fewer buyers needed financing. “There’s a very tight correlation” between the two, Woodwell said.
