RE Charge-Off Rate - Historical Chart
Charge-Off Rate on Loans Secured by Real Estate, All Commercial Banks. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series CORSREACBS. Shaded areas = NBER recession dates. Updated 2026-03-09.
What the Q4 2025 Data Shows
At 0.08%, the re charge-off rate in Q4 2025 is above the 10-year average of 0.04% by 0.04pp. The trend is downward, with decreases in 3 of the last 4 quarters.
The real estate loan charge-off rate (FRED series CORSREACBS) measures actual losses on all real estate-secured loans at U.S. commercial banks. This includes both residential mortgages and commercial real estate loans, providing a comprehensive view of real estate credit losses.
Because real estate loans are secured by property, charge-off rates in this category tend to be the lowest of any major loan type in normal times. The bank can foreclose and sell the property, recovering a substantial portion of the loan balance. But during property market crashes -- as in 2008-2010 -- recovery rates plummet and charge-offs spike.
The series is seasonally adjusted and covers all FDIC-insured commercial banks. It combines residential and commercial real estate, so movements may reflect stress in one subsector rather than both.
What This Metric Measures
This page tracks the annualized percentage of all real estate loans at commercial banks that have been written off as uncollectible. The data comes from the Federal Reserve Bank of St. Louis FRED database, series CORSREACBS, updated quarterly.
Historical Context
The all-time peak was 2.82% in Q4 2009 — roughly 35.2x the current level. The all-time trough was -0.01% in Q2 2022. During COVID-19 in 2020, the reading hit 0.06% (Q4 2020). Year-over-year, the metric has moved -33.3%.
Why It Matters
Real estate charge-offs matter more than their typically low level suggests because of sheer volume: real estate loans account for roughly 45% of total bank lending. Even a small percentage increase in the charge-off rate translates to billions in losses across the banking system.
For real estate professionals, rising charge-offs signal that banks are taking actual losses on properties similar to ones they might want to finance. That translates directly into tighter underwriting, lower LTV limits, and higher equity requirements for new real estate loans.
Bank Lending Standards: Tightening
The Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS) shows that 8.9% net of domestic banks tightened standards for C&I loans to small firms in Q1 2026. Banks have now tightened for 15 consecutive quarters. When banks tighten, businesses that cannot qualify for traditional loans often turn to merchant cash advance products with effective APRs of 60–350%.
What This Means for Business Owners
Falling charge-offs are encouraging — fewer borrowers are falling behind, and credit conditions may loosen. But if you are still carrying expensive debt, an improving aggregate number does not change your individual cash flow.
Charge-Off Rates by Loan Type - Q4 2025
Charge-off rates across all major loan categories at U.S. commercial banks:
| Category | Current | Prior Period | Year Ago | Change |
|---|---|---|---|---|
| Business Loans | 0.55% | 0.57% | 0.51% | 0.02pp ↓ |
| Credit Cards | 4.11% | 4.18% | 4.58% | 0.07pp ↓ |
| Real Estate ★ | 0.08% | 0.10% | 0.12% | 0.02pp ↓ |
| Consumer Loans | 2.81% | 2.89% | 2.98% | 0.08pp ↓ |
| All Loans (total) | 0.58% | 0.62% | 0.65% | 0.04pp ↓ |
Source: Federal Reserve FRED. All rates seasonally adjusted. ★ = primary focus of this page.
Real Estate Loan Charge-Off Rate - Frequently Asked Questions
The real estate loan charge-off rate is 0.08% as of Q4 2025, per FRED series CORSREACBS. This covers all real estate-secured loans at U.S. banks.
Real estate provides physical collateral. Even in default, banks recover significant value through foreclosure and sale. In normal markets, recovery rates on RE loans run 60-80%. It is only during market crashes when property values plunge that charge-offs spike.
The peak was 2.82% in Q4 2009 during the financial crisis when both residential and commercial property values collapsed simultaneously.
The rate moved down by 0.02pp from Q3 2025 to Q4 2025. The trend is downward, with decreases in 3 of the last 4 quarters. Watch CRE charge-offs separately for a more targeted read on commercial property losses.
Typically 12-24 months. The foreclosure process involves legal proceedings, a redemption period (in some states), and property disposition. Commercial properties take longer than residential because of the complexity involved.
FRED series CORSREACBS, from the Federal Reserve Board of Governors quarterly Charge-Off and Delinquency Rates release. Seasonally adjusted.