C&D, CRE Lending Growth Exceeds Residential

Construction-and-development and commercial real estate loans by the U.S. banking industry rose 29.5% and 9.1%, respectively, in the first nine months of 2006, compared with a growth rate of only 6.8% for one- to four-family residential loans, according to A.M. Best Co., Oldwick, N.J.Growth rates in C&D and CRE loans surpassed that of residential lending in 2003 and have done so since then, the company said, adding that the slowdown in residential lending may be partly attributable to record levels of consumer debt service obligations. The company also noted that home price appreciation has slowed. "Combined with a negative savings rate, these factors suggest that the consumer's capacity to take on additional debt is limited," A.M. Best said. The company can be found online at http://www.ambest.com.