This article is republished with permission from TreppTalk.

Only $490.6 billion of commercial and multifamily housing mortgages were originated last year, according to a survey conducted by the Mortgage Bankers Association (MBA), which is less than was expected when the year-end estimate was released in February. It is also 2.7 percent lower than the $504 billion of originations in 2015. Still, the 2016 total is the third-highest volume of originations ever, behind 2007 and 2015.

The cause of the decrease was the 11 percent drop in property sales volume last year. The MBA has found a very strong correlation between property sales volumes and loan origination volumes.

Though it is still early in 2017, things do not look good for lending volumes this year: property sales volumes were down sharply in January and February.

“The slowdown in transaction volumes would clearly have an impact” on the volume of originations, says Jamie Woodwell, MBA vice president for commercial real estate research. He adds that the postelection increase in interest rates had “taken a bit of wind out of the sails of the transactions market.”

Banks and savings institutions were the most active lenders last year, generating $157.4 billion, or 32 percent of the loans originated. Housing finance agencies followed, originating $105.8 billion, or 22 percent of the total. Surprisingly, this constituted a 22 percent increase from the previous year. Life insurance companies came in third with $77.5 billion, or 16 percent of the total, equal to the amount originated by commercial mortgage–based securities (CMBS) lenders. Life company volumes were down 5 percent from 2015, while CMBS volumes were down 16 percent.

A total of $214.1 billion, or 44 percent of all loans originated, were written against apartment properties. Office properties backed $97.4 billion, or 20 percent of the originations, and retail received $57.1 billion (12 percent). Hotels and industrial properties each backed 6 percent of the year’s total lending volume, and health care properties backed 4 percent.

* TREPP-i Survey Loan Spreads levels are based on a survey of balance sheet lenders. For more information, visit Trepp.com.