Multifamily Borrowing Closes 2021 on Strong Note; Record Year Anticipated in 2022

$ in billions

Source: MBA

The fourth quarter of 2021 saw a remarkable increase in multifamily borrowing and lending.

Loan originations were 79 percent higher in the final three months of the year compared to fourth-quarter 2020, and increased 44 percent from the third quarter of 2021. This is according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

Lending volumes are closely tied to the values of the underlying properties. In 2021 those values rose by more than 20 percent, and those increases will fuel further demand for mortgage debt in the coming years. Continued increases in property incomes, especially for multifamily properties, and stability in the ways investors value those incomes, should also support solid demand for mortgage capital, even in the face of modest increases in interest rates.

Increases in originations for other property types led the overall jump in lending volumes when compared to the fourth quarter of 2020. While the year-over-year gains for multifamily properties were smaller, 35 percent is still very strong.

2021 was a remarkable year and MBA expects 2022 to continue that momentum. Total mortgage borrowing and lending is expected to break $1 trillion for the first time in 2022, a 13 percent increase from 2021’s estimated volume of $900 billion.

Multifamily lending alone is forecast to rise to $493 billion in 2022, a new record and a 5 percent increase that surpasses last year’s record total of $470 billion.

Jamie Woodwell is the Mortgage Bankers Association’s vice president of commercial real estate research.