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Multifamily Lending Brief: 1Q 2016

Multifamily Lending Brief: 1Q 2016

At the beginning of 2016, the banks remain focused on multifamily lending. Specifically, multifamily lending activity continues to outpace other types of bank lending, yielding a rate of 1.66, indexed to 2Q 2008 volumes. Commercial & Industrial and Commercial Real Estate were positioned second (1.28) and third (1.23), respectively.

The GSE/Agency category lending continues to lead other categories by overall market share of 42.0%. Banks ranked second with 34.5% of overall market share at the end of 1st quarter 2016. Further, bank lending continued to grow aggressively, 14.0% over the last year. GSE/Agencies lending grew 10.5% during the same period, a faster pace than usual. Overall, REITs recorded the greatest year-over-year growth of 138.0%, despite owning the smallest share of the market (1.0%). Please note the release of these data from the Federal Reserve is lagged one quarter with respect to other data represented.

On an annual basis, lending activity remains aggressive between GSEs. In the year-ending 1st quarter 2016, Freddie Mac has reported $54.8 billion of new business – with year-over-year growth of 55% – while Fannie Mae has logged $44.6 billion – with year-over-year growth of 24%. Freddie Mac reported $10.2 billion of new business in 2016’s 1st quarter, up 75% from 2015’s 1st quarter. Further, Fannie Mae reported $12.6 billion of new business in 1st quarter, up 21.2% from 2015’s 1st quarter.

Market share for total multifamily lending is led by JP Morgan Chase with 17.5% as of 1st quarter 2016, tightening its share 45 basis points from last quarter. This share translates to $60.0 billion in multifamily loans, just 7% of the firm’s total loan balances. New York Community Bancorp remains second in terms of overall market share (7.7%) and first for greatest exposure to multifamily (68.4%). The bank has $26.4 billion in multifamily assets on its balance sheet.

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