Which type of financial institution provides the most funds for the residential housing market?

Commercial banks play a significant role in providing funds for the residential housing market due to their broad range of mortgage products and the scale at which they operate. They offer various loan options, including fixed-rate and adjustable-rate mortgages, making it easier for consumers to find a product that fits their financial needs.

Furthermore, commercial banks tend to have substantial financial resources, allowing them to originate and hold a large volume of residential loans. They are also heavily involved in the secondary mortgage market, where they sell loans to other investors, thus being able to free up capital to offer even more loans. This continuous cycle of lending and selling loans enables them to maintain a high level of funding available for residential mortgages.

While savings banks, credit unions, and investment banks also contribute to the residential housing market, their typical lending practices, focus on specific markets, or lack of extensive loan product offerings place them at a smaller scale compared to commercial banks.