The second quarter of this year saw continued, broad-based growth in commercial property financing, according to the most recent Capital Trends U.S. Big Picture report from MSCI Real Assets.

Deal volume grew 17% year over year during Q2 2022, a diverse improvement across multiple property sectors despite deceleration in activity over the past few months. Taking the entire first half of this year into account, the annualized improvement was even greater, with transaction volume up 38% from the same six-month period in 2021.

Multifamily housing remained atop the asset-class rankings during the second quarter. Apartment sales came in at $86.3 billion, dwarfing the $35.4 billion volume for industrial properties, the runner-up during the quarter. Multifamily sales saw a 42% year-over-year gain in Q2, but this robust jump was only good for second highest among asset types. The still-rebounding retail market, which saw 46% year-over-year growth to end Q2 with $22.6 billion in deal volume, eclipsed multifamily. Retail property sales were lifted by portfolio-level deals, but even without such blockbuster transactions, sales activity still would have grown by 38% annually in Q2.

Offices and hotels lagged in deal volume for the quarter, bringing in $24.8 billion and $9.7 billion, respectively. Office volume was down 9% year over year while hotel volume plunged 37%, although the latter figure is misleading because of a multibillion-dollar entity-level deal in Q1 2021 that inflated last year’s figure. Individual hotel-asset sales actually grew by 2% year over year.

Meanwhile, commercial property prices, as with real estate prices in general, continued to rise in the second quarter. MSCI’s national Commercial Property Price Index grew 18.5% year over year. Notably, the second-quarter rate of commercial property growth is inconsistent with current pricing in public markets. The price component of the Financial Times Stock Exchange’s index of equity real estate investment trusts, for example, dropped 8.7% annually in June. Such incongruity, according to the MSCI report, suggests that the market could be at the start of a price correction.

Even with encouraging signs across sectors, it’s still clear that the commercial real estate market is going through a slowdown phase. Sales had grown annually at an average of 144% during the past four quarters as commercial investment recovered from its pandemic-induced lull. Regression, in this case, was inevitable, although the past few months of economic uncertainty and elevated interest rate growth has certainly accelerated the process, MSCI reported.