WASHINGTON, DC-Considering the nation’s current lagging economy, it comes as a pleasant surprise that commercial/multifamily mortgage activity is thriving. As per the Mortgage Bankers Association of America’s most recent quarterly survey, the origination of commercial/multifamily mortgages reached an $18.9 billion volume during the first quarter of 2003. That figure represents a 38% increase in numbers recorded for the same quarter in 2002. Low interest rates, MBA reports, are behind these unusually positive results.”The pace of new lending is particularly impressive in light of uncertainties during the first quarter about the future of economic growth, the weak fundamentals in many commercial real estate markets, and the course of the war in Iraq,” MBA senior VP and chief economist Douglas Duncan notes. The marked trend is not a product of an average of numbers culled from specific categories. All facets of commercial/multifamily mortgages produced levels of activity higher or equal to that seen in corresponding timeframes in 2002. Commercial mortgage-back securities saw an 86% increase over last year’s numbers, while commercial bank mortgages skyrocketed a whopping 50%. Mortgages by credit companies and pension funds grew and life insurance company mortgages hovered around the same number seen in the first quarter of 2002.

But is this encouraging phenomenon a result of good luck or the start of an unlikely trend? “Looking into the future and the crystal ball is often cloudy, we need one of two things to happen,” MBA research director Jim Freund explains to GlobeSt.com. “We need economic growth to pick up, which would lead to some real strengthening of commercial real estate markets, or a continuation of historically low mortgage rates or both. With one or both of these conditions, this strain could carry on for another couple of quarters or more.”

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