August 9, 2022
SBA Hot Topic Tuesday – Secondary Market Prices Drop After a Historical High
While investors are likely satisfied with the new favorable conditions on the secondary market, lenders are now seeing a decline from the great secondary market conditions they experienced throughout the previous year and a half.
Last year, the secondary market reached prices of 122.65 for a 25-year maturity period, 120 for a 20-year maturity period,117.25 for a 15-year maturity period, 116.38 for a 10-year maturity period, and 110.25 for an 8-year maturity period.
After these record-breaking highs, secondary market prices saw a drastic fall. Loans with a 25-year maturity period dropped by nearly 8.5% since September of last year. All loans from an 8-year maturity to a 25-year maturity saw similar and proportional drops.
The SBA 7(a) secondary market prices now range from 107.5 to 112.5 depending on the loan’s maturity.
For SBA 504 1st mortgages, the variable rate is 5.5% as of August 8, 2022. The par rates for 5-year fixed to 25-year fixed rates range from 4.82% to 5.5%.