Commercial and multifamily mortgage originations saw a 20 percent spike between the third and the fourth quarters of 2016, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. However, fourth quarter originations were down by seven percent on a year-over-year measurement. The MBA blamed declining originations for hotel (down 39 percent), health care (down 24 percent) and retail properties (down 19 percent) as the primary cause for the year-over-year drop.
Looking ahead, however, the MBA projects commercial and multifamily mortgage originations will increase to $515 billion this year, up three percent from the 2016 estimated volumes of $502 billion. The multifamily market is being pegged for a vibrant year, with the MBA forecasting $219 billion in multifamily mortgage originations.
"Nationally, commercial real estate fundamentals and prices remain strong," said Jamie Woodwell, MBA's vice president of commercial real estate research. "That overall strength is expected to continue to support active sales and mortgage markets. Rising interest rates are likely to take a bit of wind out of the market, but even so, modest increases in originations should bring 2017 to record levels of borrowing and lending for commercial, and particularly multifamily, properties."
Furthermore, the MBA reported that 10 percent, or $175.9 billion, of $1.7 trillion of outstanding commercial and multifamily mortgages held by nonbank lenders and investors will mature this year. This represents a four percent decrease from the $183.3 billion that matured in 2016.