U.S. Commercial, Multifamily Mortgage Originations Up in Q2

Still on Pace with Last Year

According to the Mortgage Bankers Association's recently released Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, second quarter 2018 commercial and multifamily mortgage loan originations were four percent higher than during the same period last year and 32 percent higher than the first quarter of 2018.

"Commercial and multifamily real estate borrowing and lending continues to track with last year's level," said Jamie Woodwell, MBA's Vice President for Commercial Real Estate Research.  "Investor demand for multifamily properties and hotels are helping push originations higher, even as loan demand for retail properties is down.  New loan demand continues to be supported by still-low long-term interest rates, growing property incomes and rising values."

SECOND QUARTER 2018 ORIGINATIONS UP FOUR PERCENT COMPARED TO SECOND QUARTER 2017

A rise in originations for hotel and multifamily properties led the overall increase in commercial/multifamily lending volumes when compared to the second quarter of 2017.  The second quarter saw a 22 percent year-over-year increase in the dollar volume of loans for hotel properties, a 17 percent increase for multifamily properties, a one percent increase for retail properties, a four percent decrease for office properties, a 10 percent decrease in industrial property loans, and a 16 percent decrease in health care property loans.

Among investor types, the dollar volume of loans originated for the Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) increased by 18 percent year-over-year.  There was a six percent year-over-year increase for life insurance company loans, a one percent decrease in commercial bank portfolio loans, and an eight percent decrease in the dollar volume of Commercial Mortgage Backed Securities (CMBS) loans.

SECOND QUARTER 2018 ORIGINATIONS UP 32 PERCENT FROM FIRST QUARTER 2018

Second quarter 2018 originations for hotel properties increased 89 percent compared to the first quarter 2018.  There was an 87 percent increase in originations for retail properties, a 36 percent increase for office properties, a 25 percent increase for multifamily properties, a nine percent increase for industrial properties, and a nine percent decrease for health care properties from the first quarter 2018.

Among investor types, between the first and second quarter of 2018, the dollar volume of loans for CMBS increased 79 percent, loans for GSEs increased 33 percent, originations for commercial bank portfolios increased 22 percent, and loans for life insurance companies increased by 21 percent.