Fannie Mae multifamily MBS rises in third quarter

Government-sponsored enterprise Fannie Mae issued $16.7 billion in multifamily mortgage-backed securities during the first three quarters of this year, already rising above the total issuance for 2010.

The GSE is the largest provider of multifamily mortgage financing in the sector, and may reach $20 billion by the end of the year, if it continues at the present pace. New multifamily mortgage-backed securities business volume rose to $6.4 billion in the third quarter alone.

"Over the past two years, we have seen a significant increase in securities available for trading. Our multifamily MBS outstanding now exceeds $90 billion," said Freddie Mac's vice president of multifamily capital markets, Kimberly Johnson.

Johnson noted CMBS are thriving, when considered in the context of current market conditions. The third quarter marked the highest total activity of the year for Fannie Mae, indicating significant improvement.

Recently, the multifamily sector has shown rising rents, more new construction beginning and other signs of economic health. Occupancy rates have spiked as former homeowners choose to rent, and the relatively consistent strength of the market has led to stronger investment than other facets of the real estate industry.