Real Estate

Multifamily mortgage originations jumped 32% in the fourth quarter | 2019-02-12


Recently, the Mortgage Bankers Association predicted that multifamily lending was on track to set another record in 2018. And now that 2018 is over, we’re starting to get a look at just how good of a year it was for multifamily lending.

And just as expected, it appears that multifamily mortgage lending finished the year off on a strong note.

A new report from the MBA shows that multifamily mortgage originations jumped 32% in the fourth quarter over the same time period in 2017.

Overall, commercial real estate lending was up in the fourth quarter, climbing 14% over the previous year.

According to the MBA report, the fourth quarter saw a 61% year-over-year increase in the dollar volume of loans for healthcare properties, a 32% increase for multifamily properties, a 28% increase for industrial properties, and 1% increase for retail properties.

On the other hand, originations fell for two segments, hotel property loans (down 4%) and office property loans (down 3%).

When compared to the third quarter of 2018, the fourth quarter’s numbers look even better.

According to the MBA, multifamily originations rose by 30% in the fourth quarter compared to the previous three months. Total commercial real estate originations were up 33% over the third quarter, led by a 155% jump in health care properties.

Originations for hotels rose by 56% when compared to the third quarter, industrial properties increased by 34%, office properties rose 29%, while retail properties increased by 11%.

“2018 ended on a strong note for commercial mortgage borrowing and lending, with fourth quarter originations 14% higher than a year earlier, despite the broader market volatility,” said Jamie Woodwell, MBA’s vice president for Commercial Real Estate Research.

“Investor and lender interest in multifamily and industrial properties continues to drive transaction volumes while questions about retail and office property markets have slowed activity for those property types,” Woodwell continued. “The market as a whole ended the year roughly flat compared to 2017, continuing a plateau we’ve seen in mortgage borrowing and lending since 2015.”

The MBA report also has a first look at the year-end totals for 2018, which show that multifamily lending likely rose 22% last year when compared to 2017.

Total commercial real estate lending was up, but not by nearly as much. According to the MBA report, commercial originations were up 3% in 2018 over 2017.

By property type, originations for multifamily properties increased 22%, originations for industrial properties rose 12%, and originations increased 5% for hotel properties. On the other hand, office property originations fell by 7%, retail properties declined 13%, and healthcare properties decreased by 16%.

The MBA notes that these figures are preliminary and said that final figures will be released in late March.


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