The commercial and multifamily mortgage industry continues to see growth in the second quarter of 2015 with originations 16% higher than 1Q15 and 29% higher than 2Q14, according to figures from the Mortgage Bankers’ Association.
“Driven by increasing property values, improving property fundamentals and still low interest rates, commercial and multifamily lending and borrowing continued its strong pace in the second quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “The rate of year-over-year growth slowed from the first quarter, but year-to-date lending is up for every major lender group. Mortgage bankers’ originations for Fannie Mae and Freddie Mac are near record quarterly levels.”
According to the data, multifamily properties were the strongest property type by dollar volume year-over-year with an increase of 58%. Industrial properties were the second strongest property in this category, increasing 32%, followed by office properties with an increase of 22%.
Retail was the strongest property by dollar volume quarter-over-quarter, surging 81%. Additionally, hotel properties saw an increase of 46% by dollar volume quarter-over-quarter, followed by multifamily properties with an increase of 22%.
As commercial mortgage originations continue to trend upward, mortgage brokers would do well to consider working with non-bankable property owners who need small-balance commercial mortgages. These property owners have a need for financing that traditional lenders don’t have the means to satisfy. This under served market provides many opportunities for mortgage brokers to close more loans and earn additional income.