Record Multifamily Originations Projected

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MORTGAGE EXPERT
4 · 10 · 17

The production of commercial real estate loans secured by apartment buildings this year could accelerate to the highest level ever recorded.

Total originations of commercial mortgages that were secured by multifamily properties during all of 2016 came to an estimated
$280 billion.

That was an improvement over multifamily loan production that was generated during the previous year, when the total was $250 billion.

Last year’s estimated production was based on Freddie Mac’s Multifamily Pricing and Volume Outlook for 2017.

“Once the final 2016 numbers are in, multifamily volume is expected to hit another record, driven by increasing property prices, a full construction pipeline, a high number of maturities, and low interest rates,” the report stated. “Multifamily fundamentals moderated according to most measures but performed better than historical averages throughout the year because of continued strong demand for multifamily units from renter households and investors.”

This year, multifamily loan originations are expected to grow another 3 percent to 6 percent over 2016, Freddie predicted. The variance depends on how high the yield on the 10-year Treasury climbs.

That
could put total volume at more than $295 billion.

Author

Mortgage Daily Staff

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