The U.S. Federal Reserve is monitoring rapidly growing vacancy rates in commercial real estate and a surge in consumer credit. Overall, banks have less exposure to the slumping nonresidential housing sector than in past economic downturns. But banks with assets of $1 billion or less have a greater proportion of commercial real estate on their books than previously.
More and more office and warehouse space was becoming available as a result of job losses, particularly in technology industries. Rents have declined by 30 to 60 percent in some metropolitan areas. Growing commercial real estate vacancies have prompted concerns at the central bank about cash flow for property owners.