Commercial and multifamily mortgage bankers’ loan originations were 17.3 percent higher than the second-quarter-2005 level, according to a Mortgage Bankers Association report released today.
The year-over-year increase during the second quarter was led by solid gains among all property types, while commercial banks led the increases among investor types. Second-quarter loan originations were up 23.3 percent compared to the first quarter of 2006, while year-to-date originations for 2006 are 24.3 percent higher than at the same time last year.
“Origination activity remains strong and, while the Federal Reserve has been raising short-term rates, long-term rates have actually been falling recently,” said Doug Duncan, MBA chief economist and senior vice president of research and business development. “Our forecast calls for some moderation in economic growth with interest rates stable through the rest of the year. Continued low intermediate and long-term rates, as well as ample supply of available capital, provide a good backdrop for continued strength in commercial and multifamily market(s).”
The increase in commercial/multifamily lending activity during the first quarter was across all property types. The increase over the second quarter of 2005 included a 12.7 percent increase in loans for office buildings, an 8.8 percent increase in loans for multifamily properties, a 6.9 percent increase in loans for retail, a 33.7 percent increase in loans for industrial space, and a 32.4 percent increase for hotel properties. The largest percentage increase in lending was for healthcare properties, which saw a 177.4 percent increase from the second quarter of 2005.
Among investor types, commercial banks and life insurance companies drove much of the overall increase, although lending activity increased among most investor groups. Mortgage bankers’ originations for commercial banks increased 8.8 percent from the second quarter of 2005; originations for life insurance companies increased by 18.3 percent; originations for pension funds increased 16 percent; and originations for Fannie Mae and Freddie Mac increased 11.3 percent. FHA originations decreased 21.8 percent compared to last year, while originations for commercial mortgage-backed securities (CMBS) conduits decreased 3.3 percent from the second quarter of 2005.
Second-quarter-2006 mortgage bankers’ originations were 23.3 percent higher than originations in the first quarter of 2006. Second-quarter numbers show increases in origination volumes across all property and investor types when compared to first quarter of 2006.
Commercial and multifamily mortgage bankers’ loan originations during the first half of 2006 are up 24.3 percent compared to the first two quarters of 2005. Year-to-date originations are higher among all property types and almost all investor types.