MBA Sees a Tough Year for Multifamily, Commercial Lending
Stability will happen later in the year and a rebound should come in 2024.
Uncertainty and volatility that are disrupting the economy, interest rates, and property valuations will likely continue to cause instability for commercial real estate markets well into this year, according to the Mortgage Bankers Association (MBA).
Multifamily lending will take the brunt of the negativity, falling by about 11 percent to $393 billion, according to MBA’s head of research, Jamie Woodwell.
Combined with commercial lending, they should fall by 5 percent overall, MBA said.
However, results from MBA’s 2023 Commercial Real Estate Finance Outlook Survey conducted Nov. 30 to Dec. 15 showed that those conditions will slowly stabilize over the course of 2023. MBA anticipates borrowing and lending will rebound in 2024 to $887 billion in total commercial real estate lending and $483 billion in multifamily lending.
The survey also found that office is the CRE type most negatively affecting today’s borrowing climate, there are more deals looking for debt than there is debt looking for deals, and no capital sources are broadly expected to see increases.