The Mortgage Bankers Association (MBA) has released an updated baseline forecast, predicting a 46% decline in total commercial and multifamily mortgage borrowing and lending for this year. This is a significant decrease from the $816 billion recorded in 2022. The MBA has revised its estimates on commercial real estate mortgage volume three times since February.
According to the forecast, multifamily lending will also see a drop of 41%, with only $285 billion expected to be borrowed this year compared to last year’s $559 billion. However, there is some hope for next year as MBA predicts an increase in CRE lending with a total of $559 billion, including $339 billion for multifamily properties.
Jamie Woodwell, head of commercial real estate research at MBA stated that the logjam in the market that began last summer remains strong due to various factors such as uncertainty about supply and demand dynamics and interest rate volatility. These issues have led to decreased demand for new mortgages which will continue impacting borrowing and lending volumes over the coming quarters.
In conclusion, based on their latest forecasts it seems like there will be tough times ahead for CRE borrowers but things may improve slightly by next year.
