Led by increased
But volume was down 53%
"
The MBA's origination volume index for all commercial and multifamily lending was 175 in the second quarter, up from 145 three months prior and 370 the previous year. It is only slightly above the 169 recorded in the pandemic-impacted third quarter of 2020.
Among property types, multifamily had the second-highest percentage increase over the first quarter, at 37%, with an OVI [origination volume index] of 409 versus 299. But a year ago, the OVI was 786, resulting in a 48% drop.
However, the problems in three segments still impacted by the pandemic and its aftermath are seen in the lending patterns.
The only property types with lower activity versus the first quarter were retail and hotel.
The hotel segment's activity was down 27% quarter-to-quarter, 111 compared with 152, and 32% year-over-year, when the index was 162.
Retail originations were down 13% from the first quarter, an OVI 58 versus 67, and 55% from the second quarter of 2022, which had an OVI of 129.
Lending on health care properties had both the highest percentage gain versus the first quarter, 44%, and the largest percentage drop off from the second quarter of 2022, down 74%. The OVI for the second quarter was 46, compared with 32 three months earlier and 175 one year earlier.
Industrial remains the property type with the highest OVI, 594 in the most recent period, 27% lower than the first quarter's 152 and 32% lower than the second quarter of 2022's 162.
Among investors, the OVI for life insurance companies, after a
In the second quarter, the OVI was 238, versus 122 in the first quarter, 278 in the fourth quarter and 465 for the second quarter of 2022.
The combined OVI for
As for depositories, activity continued to sink, especially after
On Aug. 3, the MBA released its latest 2023 commercial and multifamily origination forecast, which called for $504 billion in production, down from $816 billion during 2022.
This
Multifamily only is expected to do $299 billion this year, down from $480 billion in 2022. The May forecast called for $375 billion.
This forecast can change based on what path interest rates take, and uncertainty regarding that is causing the slowdown in lending, Woodwell noted in the Aug. 3 release.
"If interest rates and cap rates fall, as we anticipate, that should help boost values and promote borrowing," Woodwell said. "If they remain higher for longer, that will suppress activity."
For 2024, the updated forecast expects commercial and multifamily mortgage originations will surpass 2022 at $856 billion. This is higher than May's projection of $829 billion.
Multifamily volume alone should be $452 billion in 2024, close to May's forecast of $456 billion.