in billions of dollars
There was an impressive 79% year-over-year increase in creations in the fourth quarter of 2021, completing what MBA estimates to be $900 billion in total volume for the year. 2022 should be even higher.
Total borrowing and mortgage lending is expected to top $1 trillion for the first time, a 13% increase from an estimated $900 billion in volume in 2021. That’s according to new MBA forecasts released on last month at our 2022 Commercial/Multifamily Finance Convention & Expo.
Commercial real estate loan volumes are closely tied to the value of the underlying properties. In 2021, these values have increased by more than 20%, and these increases will fuel additional demand for mortgage debt in the years to come. The continued rise in property income and stability in how investors value that income should also support strong demand for mortgage capital, even in the face of modest increases in interest rates.
An important point to note. MBA’s Commercial Real Estate Financing Forecast (CREF) is updated this year to target total commercial real estate lending. In recent years, forecasts have targeted loans made by specialty lenders, which excluded mortgages made by many small and medium-sized depositories. Lending volumes in this year’s forecast include these institutions.
Multifamily loans alone are expected to hit $493 billion in 2022 — a new record and a 5% increase that tops last year’s record total of $470 billion. MBA expects borrowing and lending to remain high in 2023, with just over $1 trillion in commercial real estate loans and $474 billion in multifamily loans.
Jamie Woodwell is the Mortgage Bankers Association’s Vice President of Commercial Real Estate Research.