Increase in loan originations may indicate a rebounding market

8/5/2011

Commercial lending may be on the rise. According to the Mortgage Bankers Association's Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, second-quarter borrowing originations were up 107 percent over the same period 12 months ago.

The increase in new home and business loans comes at a potential economic crossroads. Despite the rollercoaster stock market swings of early August, unemployment is down (the July rate was 9.1 percent for the nation, down from June's numbers) and the housing market and retail industry have recently shown signs of revival from the recession.

"Commercial and multifamily mortgage borrowing and lending continues to rise from the depths of 2009 and 2010," noted Jamie Woodwell, vice president of commercial real estate research for MBA.

One reason for the new gains may be the strengthening of the rental property market. Apartments are becoming more popular as Americans move toward urban centers and the country continues to reel from the housing crunch. Large cities like Boston have restyled large commercial endeavors to include more rental properties and less office space and luxury condominiums.

The doubling of loan originations in the second quarter this year resulted from growth in all types of property, from retirement communities to small business startups.