Commercial and multifamily mortgage loan originations were up in the third quarter—36% higher compared with the same period in 2024 and 18% higher than the second quarter—according to the Mortgage Bankers Association.
In the third quarter, loans for multifamily properties increased 27% year over year and 12% quarter over quarter.
“Commercial and multifamily borrowing has now increased for five straight quarters on both a quarterly and annual basis,” said Reggie Booker, associate vice president of commercial/multifamily research. “Lending activity increased last quarter across most major property types and capital sources, led by particularly strong growth in office, retail, and hotel properties. While some sectors, such as health care and industrial, saw slower activity, overall volumes reflected improving sentiment as property values stabilized and loans reaching maturity were refinanced.”
Outside of multifamily, office was the big winner, with a 181% year-over-year increase in the dollar volume of loans. Originations for retail properties saw a 100% increase, while loans for hotel properties and industrial properties were up 66% and 5%, respectively. Originations for health care properties dropped 43%.
Among investor types, the dollar volume of loans originated for investor-driven lenders jumped by 83% year over year in the third quarter. Depository lenders and government-sponsored enterprises (GSEs) also saw substantial increases of 52% and 40%, respectively. In addition, commercial mortgage-backed securities (CMBS) loans were up 5%, while life company loans were down 4%.
Retail was the winner on a quarterly basis, with third quarter originations increasing 141% compared with the second quarter. Originations for hotel and office properties also were up 76% and 67%, respectively. Declines were seen for loans for health care properties, 6%, and industrial properties, 17%.
Quarter over quarter, the dollar volume of loans for the GSEs increased 37%. In addition, the dollar volume of loans increased for depositories, 36%; CMBS loans, 31%; and investor-driven lenders, 14%. The dollar volume of loans for life insurance companies decreased by 22%.