MBA Forecasts 3% Decline in 2018 Commercial/Multifamily Origination Volume

The Mortgage Bankers Association projects commercial and multifamily mortgage originations will decline slightly in 2018, ending the year at $549 billion, down 3% percent from 2017.

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 MBA Vice President of Commercial Real Estate Research Jamie Woodwell,. “Our sense is that for commercial and multifamily mortgage borrowing and lending, the net effect is likely to be close to a wash.”

Woodwell cited rising interest rates, slowing net operating income growth, pressure on capitalization rates and fewer loan maturities as factors that could hold 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,” he said. “The magnitude and opposing impacts of some of these changes, however, raises the level of uncertainty.”

Commercial/multifamily mortgage debt outstanding is expected to continue to grow in 2018, ending the year more than 7 percent higher than at the end of 2017.

MBA commercial/multifamily members can download a copy of the Commercial/Multifamily Real Estate Finance Forecast at