Commercial mortgage lending in the U.S. expected to dive by 18 percent in 2022

U.S. mortgage and multifamily lending will fall to $733.3 billion this year, down 18 percent from $891 billion in 2021, according to forecasts compiled by the Mortgage Bankers Association.

Multifamily lending alone (which is included in the total) is expected to fall to $436 million in 2022, a 10 percent drop from last year’s record of $487 million. MBA expects lending and borrowing to recover to $882 million in commercial real estate lending and $454 million in multifamily lending in 2023.

“Rapid changes in the real estate, equity, and credit markets have a significant impact on commercial and residential real estate,” said Jamie Woodwell, MBA Vice President of Commercial Real Estate Research. “After the beginning of the year, we expect a rise in prices, continued uncertainty regarding the availability and demand of certain types of real estate, and concerns about the economy’s direction will inhibit new loans in the second half of the year. Most of the real estate market continues to be strong, and incomes and real estate values ​​have increased significantly in recent years. Therefore, MBA is waiting for a loan application return in 2023 and 2024.

Woodwell continued, “Economic trends, which remain uncertain, will largely drive the magnitude and timing of market swings. If the economy slips into recession, which — if it happens — is likely to occur in the first half of 2023, borrowing and multifamily lending and borrowing will likely be limited.”

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