Commercial and multifamily mortgage origination volume dipped in the third quarter, based on the Mortgage Bankers Association’s (MBA) quarterly survey. Third quarter originations dropped by 4% versus the same period in 2006. The year-over-year decrease was felt across most property and investor groups.
“The ongoing credit crunch slowed the volume of commercial/multifamily mortgage originations in the third quarter,” says Jamie Woodwell, senior director of commercial/multifamily research for the MBA. “Originations for commercial mortgage-backed securities (CMBS) fell 28% from the same quarter last year, and two-thirds from the second quarter of 2007.”
However, originations for life companies, the government-sponsored enterprises (Fannie Mae and Freddie Mac) and commercial banks all increased between the second and third quarters.
Adds Woodwell: “In addition to the credit crunch, it’s also important to remember that previous periods included large volumes of originations spawned by large portfolio sales [and re-sales] and the privatizations of numerous REITs.”
Among investor types, conduits for CMBS posted a decrease of 28% versus the same quarter in 2006. Commercial banks also posted an 18% decline between those periods, according to the MBA survey.
When compared with the second quarter, third-quarter origination volume fell in all property types except healthcare. In this segment, originations actually increased by 136% between the end of the second and third quarter. The biggest decline was posted in the hotel segment, where origination volume fell by 72% between the end of the second and third quarter.