Commercial and multifamily mortgage originations are at their highest level in nearly two years — driven by sequential growth in the health care and multifamily sectors.

However, the industrial sector was the biggest driver of gains, according to new figures compiled by the Mortgage Bankers Association.

The trade group's origination index value for the third quarter was 70, compared with 61 in the second quarter and 53 for the third quarter 2009. The last time the index was higher was in the third quarter 2008, when it was at 116.

When compared with the second quarter, mortgages on health care properties saw an 84% increase in loan volume, followed by multifamily properties at 50%. At the other end of the scale, there was a 54% decrease in loans for hotel properties.

But the highest index value by sector in the third quarter was for industrial properties at 145, up 129% over the third quarter 2009. This was followed by multifamily properties at 101 and health care properties at 99.

By lender type, conduits reported an increase in loan volume of 43% over the second quarter, followed by the government-sponsored enterprises at 42% and life insurers at 20%. Loans originated by commercial banks for their portfolios fell by 27%.

However, conduits remained the smallest producer in terms of volume. Since the end of 2007, these originators have done little activity and the index value of 16 for the third quarter is the highest since the first quarter of 2008, when it was 19. In the fourth quarter 2007, it was 357.
For the third consecutive quarter, life insurers had the most origination activity, with an index value of 176, up from 147 in the second quarter. The GSEs are next at 120, while the commercial banks are at 32.

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