Chrisman Commentary: Mortgage Points, Commercial Real Estate, and the US Debt Ceiling

Avatar photo
Built Team
Reviewed By
Riley Thomas
PUBLISHED: 06/15/2023

About the Episode

This episode of Chrisman Commentary, hosted by Rob Chrisman, discusses mortgage points, commercial real estate, and the US debt ceiling. It features an interview with Riley Thomas, SVP of Revenue at Built Technologies, who shares his insights on the commercial real estate space.

Key Takeaways

Takeaway 1: Lenders are using mortgage points to help borrowers, but demographic trends are impacting job relocations

Last year, about 45% of mortgage borrowers in the US used points to buy down their mortgage rates, according to Zillow. However, the rate of people relocating for work has significantly decreased, with just 1.6% relocating in the first quarter of 2023. This is likely due to a tight labor market, remote work, and increased choice in job opportunities without the need to move.

“From 1986 to 1997, 29% of job seekers relocated to a new position,” said Robbie Chrisman. “A figure that fell is 17.8% over the period from 1998 to 2007 and seemed to crater out during the pandemic at just 4.1% in 2021.”

Riley Thomas added, “In the first quarter of 2023, just 1.6% of people who relocated to take a new job, likely due to a tight labor market, remote work, and people having more choice to take their pick of work without moving.”

Takeaway 2: Regulatory scrutiny on commercial real estate portfolios affects lenders of all sizes

Regulatory scrutiny is affecting commercial real estate portfolios of all sizes, and lenders are preparing for it in various ways. Some are proactive, while others are scrambling to manage exposure to office and retail spaces.

“Everybody I’ve talked to from a 500 million dollar community bank that has exposure is the regulators, for lack of a better term, are coming in with daggers out,” said Riley Thomas. “They are a little bit reactive to what could be a pretty pervasive problem.”

Thomas also noted that larger, tier-one money center banks are in a better position, as they were more conservative with risk-based capital. However, regional and community banks might face more challenges due to their exposure to commercial real estate, especially class B and C office spaces.

Takeaway 3: Technology can play a critical role in preventing financial crises in the real estate industry

Riley Thomas believes that technology can help prevent financial crises in the real estate industry by providing better transparency and reporting on loan portfolios. Access to accurate and timely data can help lenders and regulators monitor the performance of loans and identify potential risks.

“I’ve spent the past two decades with a simple thesis that good, strong technology where you get to the atomic unit of data closest to the source will prevent and can prevent financial fallout,” he said.

“Over time we should get better as a species. We should learn how to prevent these things so that we don’t have them happen over and over again. And I believe technology will be one of the tools to do that,” Thomas concluded.

Additional Insights

  • 45% of mortgage borrowers used points to buy down the mortgage rate in 2021.
  • Class B and Class C office exposure may lead to more failed banks and liquidity crunches.
  • Money center banks are in a better position than regional banks due to their conservative risk-based capital.

For more episodes of Chrisman Commentary, visit