Will 2021 be a banner year for commercial and multifamily lending?

MBA releases annual forecast

Will 2021 be a banner year for commercial and multifamily lending?

The Mortgage Bankers Association expects a 31% increase in commercial and multifamily lending this year.

Commercial and multifamily mortgage bankers are projected to close $578 billion of loans backed by income-producing properties in 2021, up from the $442 billion loan volume seen in 2020.

“Commercial and multifamily real estate markets are moving past the pain that the COVID-19 pandemic caused in 2020,” said Jamie Woodwell, vice president for commercial real estate research at MBA. “There remain significant differences by property type, but incomes have rebounded strongly, and investor interest in real estate and real estate finance is robust. The result is strong property appreciation and increased transaction activity, both of which is fueling financings.”  

MBA said that multifamily lending alone, which includes some loans made by small and midsize banks not captured in the overall total, will grow to $409 billion in this year – a 13% jump from last year’s total of $360 billion.

Read more: Commercial and multifamily mortgage performance keeps improving

The association anticipates this growth to continue in 2022, with activity rising to $597 billion in commercial/multifamily originations and $421 billion in total multifamily lending. 

“There remains uncertainty about the impact of new strains of the virus in the fall, but even in a negative scenario – which we don’t expect -- it is hard to imagine the real estate market having to experience anything like the widespread closures of last year,” Woodwell said.