The commercial mortgage industry continues to display solid growth, particularly for multifamily properties, according to the Mortgage Bankers Association. As we’ve mentioned previously, the second quarters saw a growth of 16% from 1Q2015 and a year-over-year increase of 29%. Now is a great time for mortgage brokers to seek out multifamily property owners looking for commercial mortgages. Here’s why:

• According to the data in MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers, multifamily properties were the strongest property type by dollar volume year-over-year with an increase of 58%. Multifamily properties also posted a dollar volume increase of 22% from 1Q2015.
• Multifamily demand and new supply were roughly equal in the second quarter of 2015. The national vacancy rate held at 4.2%, according to Victor Calanog and Brad Doremus of Reis, Inc. More than 46,000 units were completed in the second quarter and absorption totaled just over 44,000 units.
• Relative to other sectors in commercial real estate, multifamily outlook appears solid for the next five years, according to Calanog and Doremus. Rent growth has strengthened over the second quarter. Demand will remain strong, and while the vacancy rate is likely to increase, “a likely increase from its current 4.2% to a year-end figure of 4.8% does not seem like a case for much worry.
• Millennials, a sizable portion of the population, continue to rely on rentals as home ownership remains unaffordable for most. “We do not believe that millennials will continue to rent for the rest of their lives, but foresee another five-to-10 year run for apartment landlords in which only the oldest of the millennials become homeowners,” Calanog and Doremus said.

Multifamily and apartment properties continue to exhibit strong and steady growth. These properties are a great start in the commercial mortgage industry for brokers who generally handle only residential properties. The solid multifamily market presents mortgage brokers with a perfect opportunity to close more commercial mortgages and earn additional income.

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