Commercial Real Estate Loan Charge-offs at Commercial Banks

The Fed reports that charge-offs and delinquency rates rose in Q4 (via CalculatedRisk):

Commercial real estate delinquencies are rising rapidly, and are at the highest rate since Q2 ’94 (as delinquency rates declined following the S&L crisis).

Residential real estate delinquencies are at the highest level since the Fed started tracking the data (since Q1 ’91).

Credit card delinquency rates are now above the previous high in 1991 (the Fed started tracking data in ’91).

Although there is credit deterioration everywhere, the rise in these three categories is especially significant. Residential delinquency rates jumped by over 1% from 5.22% to 6.29% – in just Q4! Credit card delinquencies rose from 4.83% to 5.56%, the fastest increase since the Fed started keeping records.

I made a chart of charge-off rates of real estate loans at commercial banks. Check it out.

I think its interesting that the charge-off rates during the 2000-2002 market downturn did not increase as drastically as now or in the early 90s. That the charge-off rates of both commercial and residental real estate loans have increased so dramatically this time around is evidence that this is no ordinary recession we are experiencing. I have a bad feeling this might well be a once-in-a-lifetime event for a young person like me.