Commercial Lenders are Writing Checks Again

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News Flash

Commercial Lenders Are Back in Business

Financial institutions across the US cranked up their commercial lending in Q2 2025, marking a dramatic shift from the ultra-conservative stance that defined most of 2024. The catalyst? Stability in interest rates and renewed confidence that commercial real estate won't implode.

Mortgage rates have been sliding as of early August, giving lenders the predictable environment they desperately needed. When rates aren't doing backflips every week, banks can actually plan ahead.

The numbers back up the optimism. Oxford Bank Corporation saw its Net Interest Margin jump to 5.22% year-to-date through June 30, up from 5.15% in Q1. Meanwhile, across the pond, Metro Bank tripled its half-year profit by diving headfirst into corporate and commercial lending.

What changed? Banks finally feel a sense of stability in the commercial real estate market. With clearer financing costs and more realistic valuations, the sector looks less like a gamble and more like actual business.

Refinances Are Having a Moment

Here's something unexpected: While the broader mortgage market looks sluggish, refinance activity is up.

Mortgage Capital Trading dropped some eye-opening data. Rate/term refinances climbed 5.38% month-over-month and an impressive 27.25% year-over-year. But the real star? Cash-out refinances surged 31.89% annually.

Translation: Homeowners are either optimizing their mortgage terms or cashing in on their home equity like it's going out of style.

The timing makes sense. Even minor dips in mortgage rates trigger refinance rushes. And with home values still holding strong, that equity sitting in people's houses suddenly looks very appealing for debt consolidation or home improvements.

While purchase activity drags, homeowners are actively working their existing mortgages. They're treating their homes like the financial assets they actually are.

Even when the broader market feels stuck, smart money finds a way to move. Refinance activity proves that opportunity exists if you know where to look.

Sources: [Source], [Source], [Source], [Source], [Source]

More You Should Know

• Mortgage Rates Tick Up: Despite summer being peak home-buying season, 30-year fixed mortgage rates saw a slight increase to 6.51% on August 6, 2025, with no significant decreases anticipated before the season ends. [Source]

• Foreclosures Rise in H1 2025: U.S. foreclosure filings increased by 5.8% in the first half of 2025, reaching 187,659 properties, reflecting ongoing homeowner financial struggles despite broader market improvements. [Source]

• Citibank Faces Wire Fraud Suit: A California federal lawsuit alleges Citibank failed to prevent $45 million in real estate wire fraud, despite detecting name mismatches in beneficiary and account holder information, highlighting persistent wire fraud risks in real estate closings. [Source]

• Goldman: Housing Will Drag US Growth: Goldman Sachs predicts the housing market will significantly hinder U.S. economic growth in the latter half of 2025, anticipating an 8% decline in residential investment during that period. [Source]

• CRE Investment Surges: Commercial real estate investment sales jumped significantly in the first half of 2025, signaling renewed investor confidence and improved market liquidity. [Source]

• Apartment Market Growth Slows: The U.S. apartment market maintained a steady 95.5% occupancy in July 2025, yet faced softening demand as annual rent growth decreased to a ten-month low of 0.2% due to economic challenges. [Source]

• Relaxed Land Use Means Reduced Housing Costs: New research from Five Star Cash Offer reveals that metropolitan areas relaxing land use restrictions have experienced notable reductions in housing costs, with Sarasota, Florida, showing the most significant rent drop and Providence, Rhode Island, seeing a substantial 19.22% decline. [Source]

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