The Mortgage Bankers Association’s (MBA) 2024 Commercial Real Estate Finance (CREF) Outlook Survey found that the market for commercial and multifamily mortgage originators will stabilize over the course of 2024.
The survey polled the leaders of the top commercial and multifamily mortgage finance firms for their outlook for the year ahead. Among the key findings, it said that more than 90 percent of respondents consider the current market either somewhat or very unsettled. Drilling down a bit, the office market is viewed as most negatively affecting borrowing and lending. Meanwhile, half of respondents view the industrial outlook as having positive impacts.
Further, cap rates and valuations, base interest rates, and rate volatility are all viewed as having negative impacts on today’s financing activity.
However, mortgage originators expect the market to stabilize over the course of 2024. This year, lenders are expected to have a slightly stronger appetite to lend than borrowers will have to borrow, but borrowing and lending volumes are generally expected to rise in 2024.
“Commercial real estate markets are entering 2024 amid a great deal of uncertainty and, as a result, a significant slowdown in activity,” Jamie Woodwell, MBA’s head of commercial real estate research, said. “Leaders of top commercial real estate finance firms believe that a host of factors may continue to act as a drag – rather than a boost – to the markets. However, they do believe that overall uncertainty will dissipate over the year, helping to boost borrowing and lending above 2023 levels.”
The 2024 MBA CREF Outlook Survey was conducted between Nov. 30 and Dec. 15, 2023. The survey, sent to leaders at 60 of the top commercial and multifamily mortgage origination firms, had a response rate of 40 percent.