SAN DIEGO, CA (February 11, 2018)- The Mortgage Bankers Association (MBA) projects commercial and multifamily mortgage originations will decline slightly in 2018, ending the year at $549 billion, down three percent from the 2017 volumes. MBA expects volumes to remain at roughly that level in 2019 as well. MBA forecasts mortgage banker originations of just multifamily mortgages at $248 billion in 2018, with total multifamily lending at $271 billion. After strong growth in recent years, multifamily lending is expected to hold roughly steady in 2019.
“There is a strong mix of both headwinds and tailwinds in the commercial real estate finance markets right now,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Our sense is that for commercial and multifamily mortgage borrowing and lending, the net effect is likely to be close to a wash. ”
“Rising interest rates, slowing NOI growth, pressure on capitalization rates and fewer loan maturities are some of the factors that will be holding the markets back. At the same time, continued economic growth, large amounts of investment capital looking for a home — and liking the looks of commercial real estate- and the recent tax reform legislation may all push the transaction markets forward. The magnitude and opposing impacts of some of these changes, however, raises the level of uncertainty,” Woodwell continued.
Commercial/multifamily mortgage debt outstanding is expected to continue to grow in 2018, ending the year more than seven percent higher than at the end of 2017.
MBA’s commercial/multifamily members can download a copy of MBA’s Commercial/Multifamily Real Estate Finance Forecast at http://mba.org/crefresearch.
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