MBA CREF Forecast, January 1, 2020
By Jamie Woodwell; Reggie Booker
January 1, 2020
Source: MBA CREF Forecast
Commercial and multifamily real estate markets got a shot in the arm from low interest rates in 2019. In addition to making mortgage borrowing less expensive, lower yields on a broad array of investment options are buoying the values of industrial, apartment, office, retail and other income-producing properties. This increase in property values is expected to translate into increased sales transactions and demand for mortgage debt in 2020.
MBA expects commercial and multifamily mortgage bankers to close a record $683 billion of loans backed by income-producing properties in 2020, a 9 percent increase from 2019's anticipated record volume of $628 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 9 percent to $395 billion in 2020, surpassing last year's, expected record total of $364 billion. MBA anticipates volumes will plateau in 2021, falling slightly to $660 billion in commercial/multifamily mortgage bankers originations and $392 billion in total multifamily lending.
MBA updates its commercial real estate finance (CREF) forecast at the beginning of each quarter, immediately after the release of its Commercial/Multifamily Quarterly DataBook, which tracks key indicators of trends and conditions in the economy and CRE and CREF markets.
MBA's commercial/multifamily members can download a copy of MBA's latest Commercial/Multifamily Real Estate Finance Forecast at www.mba.org/crefresearch.