Multifamily Lending Forecast to Jump 13% in 2021
Additional increases in originations are ahead in 2022, according to MBA.
$ in Billions
Looking at the first-half data of this year, it is clear that commercial and multifamily real estate markets are moving past the pain that the COVID-19 pandemic caused in 2020.
There remain significant differences by property type, but incomes have rebounded strongly and investor interest in real estate and real estate finance is robust. The result is strong property appreciation and increased transaction activity, both of which is fueling financings. This is especially the case for the multifamily sector, where demand and lending activity remains robust.
MBA is now forecasting for commercial and multifamily mortgage bankers are expected to close $578 billion of loans backed by income-producing properties in 2021, a 31 percent increase from 2020’s volume of $442 billion.
Total multifamily lending alone, which includes some loans made by small and midsize banks not captured in the overall total, is forecast to rise to $409 billion in 2021—a new record and a 13 percent increase from last year’s total of $360 billion. MBA anticipates additional increases in lending volumes in 2022, with activity rising to $597 billion in commercial/multifamily mortgage bankers originations and $421 billion in total multifamily lending.
MBA’s forecast anticipates the economic rebound to continue this year and next, with real estate benefiting both from a rebound from last year’s lows, and from broader economic growth. There remains uncertainty about the impact of new strains of the virus in the fall, but even in a negative scenario – which we don’t expect — it is hard to imagine the real estate market having to experience anything like the widespread closures of last year.”
Jamie Woodwell is the Mortgage Bankers Association’s vice president of commercial real estate research.