How Rising Interest Is Affecting Floating Rate Refis

And that’s before considering the effect of rising Treasurys yields.

The CRE refi market is tough as anyone in the business knows at this point. But the dual explanation of interest rates being high and many lenders — banks in particular — tightening standards and even pulling back from the markets is still fuzzy.

CRED iQ did some data analysis to get a better numeric understanding of at least one mechanism in place based on the Secured Overnight Financing Rate (SOFR). Rather than looking at a rate range the Federal Reserve sets for the federal funds rate, this is “a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities,” as the Federal Reserve Bangk of New York explains. Unlike the old LIBOR measure, the data is based on collected transaction costs and not self-reported numbers that banks could manipulate for gain.

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Erik Sherman

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