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U.S. multifamily mortgages grew at fastest pace since 1993

Published 03/14/2016, 11:47 AM
Updated 03/14/2016, 11:50 AM
© Reuters. A home for sale is seen next to a vacant lot in East Palo Alto, California

(Reuters) - The amount of outstanding U.S. mortgages for multifamily homes rose to $1.06 trillion in 2015, up 10.4 percent from a year earlier, which was its fastest annual pace since 1993, a U.S. industry group said on Monday.

The rise in multifamily loans helped propel the growth in commercial real estate mortgages by the largest amount since 2007, the Mortgage Bankers Association said.

Last year's pickup in commercial lending coincided with the resilience in the single-family housing market in a steady U.S. economy.

Home resales jumped by a record of nearly 15 percent at an annual pace of 5.47 million units in 2015, while housing starts average over 1.11 million units last year, the highest since 2007.

The Washington-based group, however, cautioned the recent market turbulence, if it were to persist together with regulatory changes, would disrupt the robust trend.

"While 2015 marked many new records, recent market and regulatory changes have the potential to impact the availability of commercial and multifamily mortgage debt during 2016,” said Jamie Woodwell, MBA’s vice president of commercial real estate research, in a statement.

The amount of commercial mortgage debt outstanding at the end of 2015 was $184.5 billion or 7.0 percent above a year-ago at $2.83 trillion.

In the fourth quarter, it rose $59.7 billion or 2.2 percent from the prior quarter. Multifamily loans outstanding increased $35.4 billion or 3.4 percent during this period.

© Reuters. A home for sale is seen next to a vacant lot in East Palo Alto, California

Developers broke ground at a rate of 382,000 multifamily homes at the end of 2015, compared with 356,000 units a year earlier.  

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