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MBA: Multifamily and commercial loan originations on the rise

Going into the back half of 2018, CRE is going strong

Commercial and multifamily investment continues to show strong momentum going into the back half of 2018.

According to a report from Mortgage Bankers Association, in the second quarter, commercial and multifamily mortgage loan originations rose by 4% year-over-year and soared past the first quarter with a 32% surge in originations.

"Commercial and multifamily real estate borrowing and lending continues to track with last year's level," MBA's Vice President for Commercial Real Estate Research Jamie Woodwell said in a statement.

"Investor demand for multifamily properties and hotels are helping push originations higher, even as loan demand for retail properties is down. New loan demand continues to be supported by still-low long-term interest rates, growing property incomes and rising values," he added.

According to MBA, the rise in originations for hotel and multifamily properties was primarily responsible for the bump in lending volumes.

Hotel originations had a 22% increase in YoY dollar volume of loans in Q2, while multifamily posted a 17% increase YoY in dollar volume of loans in Q2.

Quarter-over-quarter, multifamily originations jumped 25% from Q1 to Q2, while hotels received an 87% boost in originations in the same period.

According to MBA’s data, dollar volume of loans originated increased for government sponsored entities by 18% YoY; life insurance companies increased by 6% YoY; commercial bank portfolio loans decreased by 1%; and commercial mortgage backed securities loans decreased by 8%.

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