The Federal Reserve Board’s Senior Loan Officer Opinion Survey on Bank Lending Practices showed a “significant net share” of banks reporting more relaxed lending standards and weaker demand for most categories of residential real estate loans in the first quarter, according to the NAHB. Significant net shares of banks reported weaker demand for all RRE loan categories other than subprime residential mortgages.

Meanwhile, lending standards and demand for all Commercial Real Estate (CRE) loan categories, except for multifamily loans, remained unchanged. For loans secured by multifamily residential properties, banks reported eased lending standards and reported stronger demand. In Q1 2022, multifamily loans’ demand, on net, was 18.5 percent stronger. In the survey, 26.6 percent of banks reported moderately stronger demand and 66.2 percent of banks reported unchanged demand. The questions were subdivided between large commercial banks and other commercial banks.

Banks’ lending standards for loans secured by nonfarm nonresidential properties remained unchanged from the prior quarter and demand for such loans also were unchanged.

Residential real estate loan demand was weakest for qualified mortgage (QM) jumbo loans, with 51.9 percent of banks reporting weaker demand. 17.6 percent of banks reported stronger demand for revolving home equity lines of credit, exceeding the shares of banks’ reporting stronger demand in the the other RRE categories. Banks’ lending standards eased most visibly for QM jumbo and non-QM jumbo loans, the segment that is pricing out many first-time homebuyers.