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Mortgage Bankers Association Reports Jump in Commercial and Multifamily Mortgage Originations in the First Quarter of 2015

Commercial and Multifamily Mortgage Originations

In the quarterly commercial and multifamily mortgage originations survey of the Mortgage Bankers Association, the institution has reported an increase of 49% in mortgage originations in the first quarter of 2015. After an astonishing fourth quarter of 2014, loan originations were 26 percent down  in the first quarter of 2015.

During the first quarter of 2015, lending was higher for every single property type on a year-over-year period basis. As per the Commercial Real Estate Research vice-president of MBA, Jamie Woodwell, it was the multifamily lending that drove growth in first quarter originations. GSEs (Government Sponsored Enterprises) were the primary lending institutions for multifamily loans with an increase of 306 percent as compared to the previous year quarter. Commercial Mortgage Backed Securities (CMBS) loans were the second primary lenders with a 113 percent increase from the prior year period.

Industrial and multifamily properties accounted for the majority of lending with the dollar volume of loans for industrial properties achieving gains of 269 percent. Other major properties, including multifamily properties, office properties, and hotel properties witnessed an increase of 71 percent, 53 percent, and 51 percent, respectively.

Among properties losing a percentage of loan originations in the first quarter of 2015 when compared with the last quarter of 2014, health care properties aced the list. Loan originations for health care properties were down 62 percent as compared to the fourth quarter of 2014. At the same time, retail properties witnessed a 57 percent decline in originations. Other property types losing originations percentage include hotel properties, multifamily properties, and office properties.

Chicago Fed President expects rate hike to start earlier this year

Charles Evans, Chicago Fed President, said that a federal interest rates hike could start earlier this year. While talking to the reporters, Evans said that a gradual increase in interest rates is not likely to affect economic recovery, although he added that a long-term view of the monetary policy is the primary catalyst in such decisions.

While talking about inflation and unemployment, Evans said that in-line with the current rate of inflation; it might take until 2018 to reach the federal inflation target of 2 percent. He added that the unemployment rate at 5.5 percent for March is nearly 0.5 percent higher than the optimal standards.

It is important to know that Evans is a voting member of the U.S. Central Bank policy panel. A major percentage of fed officials are hopeful for economic recovery by the end of the year, which will allow hike in federal interest rates later this year.

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