MBA Sees CRE Loan Originations Declining, Maturities Increasing in 2023
Total commercial and multifamily mortgage borrowing and lending is expected to fall to $684 billion this year, a 15% decline from an expected 2022 total of $804 billion. This is according to an updated baseline forecast released by the Mortgage Bankers Association (MBA) at the 2023 Commercial/Multifamily Finance Convention and Expo.
Multifamily lending alone is expected to drop to $384 billion in 2023 – a 16% decline from last year’s expected total of $459 billion. MBA anticipates borrowing and lending will rebound in 2024 to $906 billion in total commercial real estate lending, including $486 billion in multifamily lending.
“MBA’s updated forecast is built on a base case of economic weakness at the start of 2023 with a moderation in interest rates and an overall improvement in the economy as the year goes on,” said Jamie Woodwell, MBA’s head of commercial real estate research.
The association also forecasts that $331.2 billion of the $2.8 trillion of outstanding commercial and multifamily mortgages held by non-bank lenders and investors will mature in 2023, up 33% from the $249 billion that matured in 2022.
Woodwell added, “We expect loan maturities and outstanding adjustable-rate loans to lead the testing of today’s market conditions. For long-term loans, the last decade has seen tremendous growth in property incomes and values – both of which will support properties’ abilities to support new loans. Properties with interest rate resets and shorter-term loans that transacted or refinanced more recently will be much more dependent on the particulars of that loan and property.”