The Mortgage Bankers Association (MBA) has revised its forecast for the commercial and multifamily mortgage borrowing and lending environment and is now predicting this sector will fall to $654 billion this year, down 20% from the $816 billion generated in 2022.
If multifamily lending were viewed as a standalone, that figure would drop to $375 billion in 2023, down 14% decline from last year’s expected total of $437 billion.
However, MBA also had a more encouraging forecast for next year, with an anticipated borrowing and lending rebound to $829 billion in total commercial real estate lending – multifamily lending would account for $456 billion of that total.
“Higher interest rates, uncertainty about property values, and questions about the outlook for the cash flows of some properties led to a slowdown in commercial real estate transactions and financing beginning in the middle of 2022,” said Jamie Woodwell, MBA’s head of commercial real estate research. “That slowdown is likely to persist through much of this year as investors, lenders, and others look for greater transparency into the markets. We expect maturing loans to begin to break the logjam and provide greater clarity as this year goes on. However, it may take until 2025 for volumes to get back to previous years’ levels.”