Multifamily mortgage originations helped commercial/multifamily origination volumes grow 25% in the second quarter from the year-ago period, according to the Mortgage Bankers Association’s quarterly survey. It also showed that second-quarter volumes expanded 39% from the first quarter.
The annual increase includes a 19% jump in the dollar volume of loans for multifamily properties, a 56% boost for retail properties, a 22% rise for hotel properties, a 15% increase for office properties and an 11% increase in health care property loans. The gains offset a 5% decrease in industrial property loans.
Among investors, the dollar volume of loans for commercial bank portfolios increased 58% over the second quarter of 2011. Loan volumes for Fannie Mae and Freddie Mac shot up 50% in that period, while volumes for commercial mortgage-backed securities rose 16%.
Commercial and multifamily mortgage originations in the second quarter rose 39% from in the first quarter, caused by an astounding 147% increase for hotel properties and a 21% rise in originations for multifamily properties.
The multifamily sector is continuing to outperform the rest of the commercial real estate market, Barclays Capital ()
And preliminary trends released by REIS, a commercial real estate data provider, show that the nation's multifamily vacancy was 4.7% in the second quarter, 20 basis points lower than the previous quarter. It is the first time the rate has fallen below 5% since 2001, and only the third time in 30 years.
“Commercial and multifamily mortgage lending and borrowing continued to pick up in the second quarter,” said Jamie Woodwell, MBA vice president of commercial real estate research. “Low interest rates and continued stabilization and growth in the commercial real estate markets are helping support new loan originations, and every major investor group increased their lending over the quarter.”
However, at the National Association of Real Estate Editors conference in Denver in June, Stan Humphries, chief economist at Zillow (Z) said the multifamily sector would "be the next bubble," but backed off from associating that word with the "armageddon this country just endured."
"I have trouble thinking of any other market that is as prone to booms and busts as the real estate market," Humphries said in an interview with HousingWire. "What makes this one a little bit different is that it's almost the echo of a very large bust, meaning that what is causing the rental boom is the mirror of the housing bust."