Commercial and multifamily mortgage loan originations during the third quarter were up by 18% from the previous quarter and up 36% year-over-year, according to data from the Mortgage Bankers Association (MBA).
Originations for office, retail, hotel, and multifamily properties fueled the year-over-year upswing. MBA noted there was an 181% year-over-year increase in the dollar volume of loans for office properties, a 100% increase for retail properties, a 66% increase for hotel properties, a 27% increase for multifamily properties, and a 5% increase for industrial properties.
However, originations for health care properties loan originations decreased 43% from the third quarter of 2024.
Among investor types, the dollar volume of loans originated for investor-driven lenders increased by 83% year-over-year. There was a 52% increase in loans for depositories lenders, a 40 percent increase in loans for government-sponsored enterprises, and a 5% increase in commercial mortgage-backed securities loans. Only life company loans registered a downturn with a 4% year-over-year decrease.
“Commercial and multifamily borrowing has now increased for five straight quarters on both a quarterly and annual basis,” said Reggie Booker, MBA’s associate vice president of commercial/multifamily Research. “Lending activity increased last quarter across most major property types and capital sources, led by particularly strong growth in office, retail, and hotel properties. While some sectors, such as health care and industrial, saw slower activity, overall volumes reflected improving sentiment as property values stabilized and loans reaching maturity were refinanced.”
