WASHINGTON, D.C. — Commercial and multifamily mortgage loan originations increased 59 percent in the third quarter of 2024 compared to a year ago, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The third-quarter volume also represents a 44 percent increase from the second quarter.
There was a 510 percent year-over-year increase in the dollar volume of loans for healthcare properties, a 99 percent increase for hotel properties, 82 percent increase for retail properties, 57 percent increase for industrial properties and a 56 percent increase for multifamily properties. Office real estate originations decreased 3 percent from a year ago.
Among investor types, the dollar volume of loans originated for commercial mortgage-backed securities (CMBS) increased by 260 percent year-over-year. There was a 69 percent increase for depository (i.e. bank) loans, a 62 percent increase for investor-driven lender loans, 31 percent increase in loans for life insurance companies and a 28 percent increase in loans from government-sponsored enterprises (GSEs, namely Fannie Mae and Freddie Mac).
Jamie Woodwell, MBA’s head of commercial real estate research, says that lower interest rates due in part to the Federal Reserve’s 50-basis-point decrease in September were “a key driver” for the uptick in third-quarter loan originations. At the November meeting of the Federal Open Markets Committee (FOMC), the central bank once again cut the federal funds rate, though this reduction was for 25 basis points.
The 10-year Treasury yield also moved from an average of 4.3 percent in June to 3.7 in September, but Woodwell warned that the long-term rate’s recent increase may slow stunt the momentum for originations in the fourth quarter. (The 10-year Treasury yield was nearly 4.3 percent as of this writing.)