The Non-Bank Lending Boom Is Starting to Crack

Default rates in some markets hit 7.4%

The private credit boom that followed the 2023 regional banking crisis has fundamentally reshaped real estate finance, with non-bank lenders capturing market share that traditional institutions show little appetite to reclaim. As regional banks retreated under regulatory pressure and balance sheet constraints, private credit funds deployed hundreds of billions into property lending, offering speed, certainty, and flexibility that conventional lenders couldn’t match. The single-family construction and fix-and-flip market became an early testing ground for this capital. What’s emerging now in stressed markets offers a preview of how private credit performs when assumptions break down, and the implications extend far beyond residential real estate into every corner of commercial property finance...   ...more

RSK: We went through this once or twice before. Remember the old Land Contract Days?