The Mortgage Bankers Association today released its quarterly commercial and multifamily mortgage loan originations survey for the second quarter of 2004, showing continued growth in mortgage originations.

Commercial mortgage bankers originated $33.2 billion, up by 17.4 percent ($4.9 billion) from the same quarter in 2003 and up 54.1 percent ($11.6 billion) from the first quarter of 2004. The large increase from the first quarter reflects the traditional cycle of low levels of first-quarter originations followed by a pick-up in the second quarter.

“The second quarter extends a period of record capital flows to the commercial and multifamily real estate markets, and sets 2004 on pace to exceed 2003’s record origination volumes,” said Doug Duncan, MBA’s chief economist and senior vice president.

Originations for office and retail properties increased by $2.3 billion and $1.7 billion, respectively, compared with the second quarter of 2003. Office property originations increased by 41 percent and retail property originations increased by 38 percent compared with the same period last year. In contrast, multifamily loan originations decreased by 4 percent compared with last year (the second straight quarter of multifamily declines). Origination levels among investor groups, such as commercial banks, Fannie Mae/Freddie Mac, pension funds, Federal Housing Administration (FHA), life companies and others also increased. Commercial mortgage-backed securities (CMBS) conduits and credit companies showed declines in origination volume.

Second-quarter 2004 originations were $11.6 billion or 54 percent higher than originations in the first quarter of 2004, largely reflecting the traditional cycle of low-level first-quarter origination volumes followed by a pick-up in the second quarter. The quarter-over-quarter increase was broad-based, and included increases in every property and investor type. The quarter-over-quarter increases included an 88 percent increase in multifamily lending and a 47 percent increase in office lending. On the investor side, originations for pension funds, Fannie Mae/Freddie Mac, FHA and commercial banks all increased by more than half from the first to second quarter.

The Mortgage Bankers Association is a national association representing the real estate finance industry.

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