Source: Mortgage Bankers Association
Commercial and multifamily mortgage originations increased 59% in the third quarter of 2024 compared to a year ago, according to the Mortgage Bankers Association Quarterly Survey of Commercial/Multifamily Mortgage Originations released last year. , an increase of 44% from the second quarter of 2024. month.
After a slow start to the year, lending backed by commercial real estate increased in the third quarter. Lower interest rates were the main driver of the rise, with 10-year Treasury yields dropping from an average of 4.31% in June to 3.72% in September during the quarter. Long-term interest rates have been rising recently, which could slow last quarter’s momentum.
Each property and loan is unique and faces different situations depending on its property type, market, submarket, vintage, business plan, etc. All these factors will impact the amount of borrowing/lending in the coming quarters.
Number of origins increased by 59% in Q3
The number of starts in Q3 2024 varied by property type. Loans for healthcare real estate increased 510 percent year-over-year, hotel real estate increased 99 percent, retail real estate increased 82 percent, industrial real estate increased 57 percent, and real estate real estate increased 56 percent. Increase for apartment complexes. Office real estate originations were down 3%.
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By investor type, the amount of loans originated for commercial mortgage-backed securities increased 260% year over year. Vault loans increased by 69%, investor-driven lender loans increased by 62%, loans to life insurance companies increased by 31%, and government-sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) increased by 28%. debt.
3rd quarter starts up 44% from 2nd quarter
On a quarterly basis, healthcare real estate originations increased 191 percent in the third quarter of 2024 compared to the second quarter of 2024. Commercial property compositions increased by 56 percent, multifamily compositions increased by 53 percent, and multifamily compositions increased by 42 percent. Office real estate increased and industrial real estate originations increased by 21%. Loans for hotel real estate decreased by 25%.
By investor type, from Q2 to Q3 of 2024, depository lending increased by 86%, GSE lending increased by 55%, life insurance company lending increased by 40%, and investor-driven loans to financial institutions increased by 21%. And lending to CMBS increased by 12 percent.
—Posted on December 27, 2024
