Commercial/Multifamily Borrowing Up in the Fourth Quarter of 2024, MBA Reports
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Commercial and multifamily mortgage loan originations were 84% higher in the fourth quarter of 2024 compared to a year earlier, and increased 30% from the third quarter of 2024, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, released Feb. 10 at the 2025 Commercial/Multifamily Finance Convention and Expo.
“2024, and particularly the fourth quarter, was a welcome rebound for the industry following a slow pace of origination activity in 2023. The significant, but brief, dip in interest rates in September, followed by a pickup in market sentiment post-election, resulted in more business, with origination activity back to 2022 levels,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “The triple-digit percentage increases in the origination indexes certainly reflect this bounce off a low base. With interest rates moving up again to start 2025, we will have to see how origination activity responds through the first quarter. However, MBA still expects more borrowing and lending in 2025.
ORIGINATIONS INCREASE 84% IN THE FOURTH QUARTER OF 2024
Originations for all major property types increased when compared to the fourth quarter of 2023. There was a 124% year-over-year increase in the dollar volume of loans for hotel properties, a 105% increase for office properties, a 94% increase for industrial properties, a 72% increase for health care properties, a 69% increase for multifamily properties, and retail property loan originations increased 48%, respectively, compared to the fourth quarter of 2023.
Among investor types, the dollar volume of loans originated for commercial mortgage-backed securities (CMBS) increased by 128% year-over-year. There was a 94% increase in loans for depositories, an 81% increase in investor-driven lender loans, a 72% increase in government sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) loans, and a 70% increase in life insurance company loans.
FOURTH QUARTER ORIGINATIONS UP 30% FROM THE THIRD QUARTER OF 2024
On a quarterly basis, fourth-quarter originations for hotel properties increased 159% compared to the third quarter 2024. There was a 55% increase in originations for retail properties, a 43% increase for office properties, a 22% increase for multifamily properties, and a 10% increase for industrial properties. Originations for health care properties decreased 51% compared to the third quarter of 2024.
Among investor types, between the third and fourth quarters of 2024, the dollar volume of loans for investor-driven lender increased 51%, loans for GSEs increased 36%, originations for depositories increased 34%, loans for life insurance companies increased 21%, and the dollar volume of loans for CMBS increased by 6%.
PRELIMINARY 2024 ORIGINATIONS 39% HIGHER THAN 2023
A preliminary measure of commercial mortgage bankers’ originations volumes shows activity in 2024 was 39% higher than in 2023. By property type, mortgage bankers’ originations for health care properties increased 134% from 2023, hotel properties increased 100%, industrial properties increased 73%, multifamily properties increased 27%, retail properties increased 21%, and office properties increased 6%.
Among investor types, for 2024 compared to 2023, mortgage bankers’ originations for CMBS increased 150%, originations for investor-driven lenders increased 52%, loans for life insurance companies increased 38%, loans for depositories increased 20%, and GSE loans increased 17%.
In late March, MBA will release its Annual Origination Summation report for 2024 with final origination figures for the year.
To view the report, please click here.
