Commercial/Multifamily Borrowing Up In The Fourth Quarter Of 2024

Commercial and multifamily mortgage loan originations were 84 percent higher in the fourth quarter of 2024 compared to a year earlier, and increased 30 percent from the third quarter of 2024, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

“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 PERCENT 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 percent year-over-year increase in the dollar volume of loans for hotel properties, a 105 percent increase for office properties, a 94 percent increase for industrial properties, a 72 percent increase for health care properties, a 69 percent increase for multifamily properties, and retail property loan originations increased 48 percent, 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 percent year-over-year. There was a 94 percent increase in loans for depositories, an 81 percent increase in investor-driven lender loans, a 72 percent increase in government sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) loans, and a 70 percent increase in life insurance company loans.

FOURTH QUARTER ORIGINATIONS UP 30 PERCENT FROM THE THIRD QUARTER OF 2024

On a quarterly basis, fourth-quarter originations for hotel properties increased 159 percent compared to the third quarter 2024. There was a 55 percent increase in originations for retail properties, a 43 percent increase for office properties, a 22 percent increase for multifamily properties, and a 10 percent increase for industrial properties. Originations for health care properties decreased 51 percent 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 percent, loans for GSEs increased 36 percent, originations for depositories increased 34 percent, loans for life insurance companies increased 21 percent, and the dollar volume of loans for CMBS increased by 6 percent.

PRELIMINARY 2024 ORIGINATIONS 39 PERCENT HIGHER THAN 2023

A preliminary measure of commercial mortgage bankers’ originations volumes shows activity in 2024 was 39 percent higher than in 2023. By property type, mortgage bankers’ originations for health care properties increased 134 percent from 2023, hotel properties increased 100 percent, industrial properties increased 73 percent, multifamily properties increased 27 percent, retail properties increased 21 percent, and office properties increased 6 percent.

Among investor types, for 2024 compared to 2023, mortgage bankers’ originations for CMBS increased 150 percent, originations for investor-driven lenders increased 52 percent, loans for life insurance companies increased 38 percent, loans for depositories increased 20 percent, and GSE loans increased 17 percent.

In late March, MBA will release its Annual Origination Summation report for 2024 with final origination figures for the year.