The Mortgage Bankers Association (MBA) expects commercial and multifamily mortgage borrowing and lending to increase 26 percent in 2024 to $539 billion.
Just multifamily lending alone is anticipated to rise 21 percent to $297 billion this year.
“The recent moderation in interest rates, coupled with the large volume of loans maturing in coming quarters, should prompt an uptick in mortgage borrowing from the low levels we’ve seen over the last two years,” Jamie Woodwell, MBA’s head of commercial real estate research, said. “The exact timing of the bounce-back will depend on how quickly property owners jump on long-term interest rates that are down significantly from where they were a year ago.”
Next year, MBA anticipates borrowing and lending to increase to $665 billion in total commercial real estate lending, with $390 billion of that total in multifamily lending.
“Commercial mortgage originations have historically followed property prices, and the uncertainty about the future path of interest rates has been a contributing factor to the current slowdown – with many investors holding off selling or refinancing a property in the hope of lower rates,” Woodwell added. “With longer term rates now lower, many of those players are likely to take action. Investors looking to shorter-term financing can also take solace in signs from the Federal Reserve that they will soon begin bringing down the short end of the curve.”