MBA: Commercial, Multifamily Loan Originations Jumped 72 Percent in First Quarter

by John Nelson

WASHINGTON, D.C. — Commercial and multifamily mortgage loan originations increased 72 percent in the first quarter of 2022 compared with the same period last year, according to the Mortgage Bankers Association (MBA). In line with seasonality trends, originations during the first three months of 2022 were 39 percent lower than in the fourth quarter of 2021.

By property type, loan originations for hotels increased by 359 percent year-over-year, followed by industrial (145 percent), retail (88 percent), healthcare (81 percent), multifamily (57 percent) and office (30 percent).

Among investor types, the dollar volume of loans originated for depositories (banks) increased by 194 percent year-over-year, followed by life insurance companies (81 percent), investor-driven lenders (77 percent), conduit lenders (56 percent), and government-sponsored enterprises Fannie Mae and Freddie Mac (1 percent).

Jamie Woodwell, MBA’s vice president of commercial real estate research, says that the year-over-year swing in loan volume is the result of strong demand for the various real estate categories. The veteran economist says rising interest rates could be a fly in the ointment for borrowers for the foreseeable future. The 10-year U.S. Treasury yield closed at 2.93 percent on May 13, up from 1.63 percent at the start of the year.

“It’s likely that the rise in interest rates will take some wind out of the sails of borrowing in upcoming quarters, but strong market fundamentals, property values and investor interest should continue to support the market,” says Woodwell.

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