Mortgage originations for multifamily and commercial properties dropped during the third quarter, according to a survey by the Mortgage Bankers Association of America (MBA).
The quarterly survey of mortgage bankers revealed a 12.4% monetary decrease in mortgages on income-producing properties since the second quarter, and a 6% decrease since third quarter 2001. The bankers, who are also MBA members, also reported year-to-date (YTD) mortgage volumes taking a 1.2% dip from the same time last year.
"Our members are reporting no shortage of money available to lend, but a shortage of credit-worthy deals," said Stacey Berger, chairman of MBA's Commercial Real Estate Research Committee. "Thus, despite very low variable- and fixed-rate mortgages, lending volume has been a little soft."
The survey respondents reported originating a total of $17.8 billion in mortgages on income-producing properties during the third quarter. That's compared with $20.4 billion in the second quarter and $18.7 billion in third quarter 2001.
The biggest decline came in multifamily lending -- $8.2 billion during the third quarter, compared with $10.5 billion in the second quarter and $10.1 billion in third quarter 2001. That category generated more loans than any other property type during the quarter, but its year-to-year 19.2% decline was the steepest drop.
However, part of the drop was attributable to a single, very large multiproperty transaction that took place during the third quarter of last year, the survey said.
Lending for office buildings came in at $3.66 billion, a 6.6% decline from the second quarter and an almost 15% drop from the third quarter 2001.
Retail property lending during the third quarter totaled $2.7 billion. That's a 2.7% decrease from the second quarter, but an almost 50% jump from the $1.9 billion of the third quarter 2001.
The largest increase came from health care properties. That type of lending totaled $0.5 billion, an 83.4% jump from second quarter's $0.3 billion and a 69% increase from last year, according to the survey.
Other property types included industrial, which decreased 7% since the second quarter; hotel/motel, which declined 15.4% since the second quarter and 34.1% since third quarter 2001; and the catch-all "other," which saw a 5.9% decline since second quarter.