During the first quarter of 2006, commercial and multifamily mortgage bankers’ loan originations increased 34.2 percent compared to the same quarter last year, according to the Mortgage Bankers Association.

The year-over-year increase during the first quarter was led by solid gains among all property types, while commercial mortgage-backed securities conduits and commercial banks led the increases among investor types. First-quarter loan originations were down 37.4 percent compared to the fourth quarter of 2005.

“The first quarter is traditionally when originators recover from the flood of year-end activity and build the foundation for the year ahead,” noted Douglas G. Duncan, MBA chief economist and senior vice president of research and business development. “While it is unknown if the rate of growth seen in these markets during 2005 will continue at the same pace through 2006, first quarter numbers indicate no immediate signs of slowing.”

The increase in commercial/multifamily lending activity during the first quarter was across all property types. The increase over the first quarter of 2005 included a 26 percent increase in loans for office buildings, a 23 percent increase in loans for multifamily properties, a 55 percent increase in loans for retail, a 33 percent increase in loans for industrial space, and a 123 percent increase for healthcare properties. The largest percentage increase in lending was for hotel properties, which saw a 165 percent increase from the first quarter of 2005.

Among investor types, commercial banks, life insurance companies and CMBS conduits drove much of the overall increase, although lending activity increased among almost all types. Mortgage bankers’ originations for commercial mortgage-backed securities conduits increased 35 percent from the first quarter of 2005; originations for commercial banks increased by 64 percent; and originations for life insurance companies increased 2 percent. Originations for Fannie Mae and Freddie Mac increased 29 percent; originations for FHA increased 62 percent; and originations for pension funds dropped by 86 percent from the fourth quarter of 2005.

First-quarter 2006 mortgage bankers’ originations were 37 percent lower than originations in the fourth quarter of 2005, reflecting the industry’s usual push to finalize deals before the end of the year, and the traditional and subsequent drop-offs in first-quarter numbers. First-quarter numbers show decreases in origination volumes across all property and investor types when compared to fourth quarter of 2005.

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