And when it comes to commercial real estate, "the demand seems almost unquenchable," Washington Federal CEO Brent Beardall told CNBC's The Exchange this week.
"Clearly the increasing costs of financing are having an impact but the reality is the majority of commercial real estate is housing-related," he said. "And we're still seeing in our markets 95% occupancy in multifamily and year over year rent growths of around 15%….we're still seeing sponsors want to move ahead."
Western states are continuing to benefit from strong in-migration patterns accelerated by the pandemic, Beardall told CNBC.
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"You look where people want to live, it's basically our eight western states," he said. "The majority of these state governments have been very pro-business, they've taken the pandemic seriously but they've said we're not going to close down and you've seen it in the economic vitality of those states."
Beardall acknowledged, however, that increasing interest rates are driving up the costs of homeownership, however, and cooling many once-hot housing markets.
"There is no question that the Fed's actions are having an impact," Beardall told CNBC. With the 30-year fixed mortgage rate hitting highs north of 6.95%, "demand has just plummeted," he said. Washington Federal's applications are down 50%, which Beardall said is better than the industry as a whole. Business loans are a mixed bag: some people are pulling back, Beardall said, swayed by recession fears, while other small business owners report having higher sales and profit margins than ever.
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