Banks have tightened their underwriting standards on commercial real estate loans, according to a Federal Reserve Board survey, and more respondents reported weakened demand for CRE loans than did so three months ago.The Fed's survey of senior loan officers in October found that nearly 40% of banks tightened their underwriting of commercial real estate loans and 25% said demand for CRE loans had weakened. Meanwhile, 60% of the banks reported that demand for home loans had continued to weaken since the July survey. Separately, the Census Bureau reported that private construction spending for commercial real estate buildings increased for the seventh straight month, while residential construction declined for the sixth straight month. Since the beginning of the year, the value of CRE construction put in place is up 13.9% to $312.7 billion, and residential construction is down 8.4% to $610.0 billion.

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