Commercial mortgage originations increased 5% in the third quarter compared with the same period last year, driven by a huge increase in government-sponsored enterprise volume, according to the Mortgage Bankers Association.
"Rising property values, robust property fundamentals, low interest rates and a strong transaction market continue to drive potentially record-setting paces in commercial and multifamily mortgage originations. Through the first nine months of the year, borrowing and lending backed by commercial real estate is running 2% ahead of last year's pace," said Jamie Woodwell, MBA's vice president of commercial real estate research, in a press release.
The dollar volume of loans originated for Fannie Mae and Freddie Mac increased by 82% year over year. However, there was a 3% decrease for life insurance company loans, a 4% decrease in loans originated for commercial mortgage-backed securities and a 9% decrease in bank portfolio loans.
But "after a slow start to the year, the commercial mortgage-backed securities market also saw a pick-up in the third quarter," said Woodwell, pointing to a 96% increase in volume for this loan type compared with the second quarter. Fannie Mae and Freddie Mac commercial loan originations increased by 35% over the second quarter.
Total volume was up 7% from the second quarter, with bank originations down 25% and life insurer originations down 4%.