Credit woes worsen for commercial construction
While borrowing rates have fallen for prime-rate mortgages and public works, they've increased for commercial projects, and relief most likely won't come until 2009.
While borrowing rates have fallen for prime-rate mortgages and public works, they’ve increased for commercial projects —and relief most likely won’t come until 2009.
Mortgage strongholds Fannie Mae and Freddie Mac needed a lifeline from the U.S. government to avoid going bust. Investment giants Lehman Brothers went belly up to the tune of $600 billion in dept. Merrill Lynch avoided total collapse by being swallowed by Bank of America. All of these events have added to the market attitudes that keep nervous lenders from opening their wallets to commercial projects.
What’s ahead for construction firms? Most likely, relief won’t come until well into 2009; before then, there will likely be more bankruptcies in the financial market, and lending standards will continue to tighten.