MBA Forecast: Higher Rates, Uncertainty to Slow Commercial/Multifamily Lending

Total commercial and multifamily mortgage borrowing and lending is expected to fall to $504 billion this year, a 38 percent decline from 2022’s $816 billion total. This is according to an updated baseline forecast released by the Mortgage Bankers Association.

Multifamily lending alone (which is included in the total figures) is expected to drop to $299 billion in 2023 – a 38 percent decline from last year’s total of $480 billion.

MBA anticipates borrowing and lending will rebound in 2024 to $856 billion in total commercial real estate lending, with $452 billion of that total in multifamily lending.

“Higher and volatile interest rates, uncertainty about property values, and questions about some property fundamentals have led to an impasse in property sales and mortgage originations activity this year,” said MBA Head of Commercial Real Estate Research Jamie Woodwell. “Our baseline economic forecast anticipates that interest rates will moderate over the next year and half, helping to break the current logjam in transaction activity and bringing relief to financing costs and property valuations.”

Woodwell noted one caveat: that different interest rate paths would lead to different forecast outcomes. “Commercial mortgage originations have historically followed property prices – with increases in values pushing mortgage borrowing and lending volumes higher and declines pulling them lower. If interest rates and cap rates fall, as we anticipate, that should help boost values and promote borrowing,” he said. “If they remain higher for longer, that will suppress activity. The uncertainty about future interest rate paths is a contributing factor to today’s slowdown.”

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

For additional commentary, visit MBA’s Commercial/Multifamily Market Intelligence Blog.