A total of $480.1 billion in new mortgages were originated in 2022 for apartment buildings with five or more units, according to new data from the Mortgage Bankers Association. This represents a 1% year-over-year decline.
Last year’s total was generated by 2,242 lenders, the MBA added, with 33% of the active lenders making five or fewer multifamily loans during the year. The top five multifamily lenders in 2020 by dollar volume were JP Morgan Chase & Company, Wells Fargo, Walker & Dunlop, Berkadia, and Capital One Financial Corp. The mortgages went to a variety of investors, depositories accounting for the greatest share (42%) by dollar volume.
“Multifamily borrowing remained strong in 2022, largely as a result of lending by banks,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Beginning in last year’s third quarter, rising and volatile interest rates, uncertainty about property values, and questions about some property fundamentals led to a fall off in borrowing and lending across commercial property types, including multifamily.”
Woodwell added, “Most capital sources saw a significant decline in lending activity in 2022, but bank activity increased by an almost equal amount. It’s unlikely that this momentum is occurring this year, given current evidence that banks have tightened underwriting standards and borrower demand has weakened.”
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