According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial / Multifamily Mortgage Bankers Originations, commercial and multifamily borrowing declined in the first quarter of this year.
“While the first quarter is typically the quietest quarter of the year, borrowing and lending backed by commercial and multifamily properties declined in the first quarter to the slowest pace since the first quarter of 2014,” MBA Head of Commercial Real Estate Research Jamie Woodwell said. “Uncertainty and volatility in regard to interest rates and property values, and supply and demand imbalances for some property types, has led to a logjam in commercial real estate sales and financing markets.”
Per the report, mortgage loan originations were 56 percent lower in the first quarter of 2023 compared to a year ago while declining 42 percent from the fourth quarter of 2022. Decreases in originations for all major property types resulted in the overall drop in commercial / multifamily lending volumes when compared to the first quarter of 2022.
“As loans mature and adjustable-rate loans reset, we should start to get greater insights into where things stand,” Woodwell said.
With regard to investor types, the MBA noted the survey showed dollar volume of loans originated for life insurance company loans declined by 73 percent year-over-year while there was a 67 percent decrease for investor-driven lenders, a 59 percent decline in commercial mortgage-backed securities (CMBS) loans, a 54 percent decrease for depositories, and a 14 percent decline in the dollar volume of government sponsored enterprises (GSEs) – Fannie Mae and Freddie Mac loans.