Commercial and multifamily originations slow on economic uncertainty

Of the total figure, multifamily lending alone will plunge to $436 billion in 2022, a 10% decline from the previous year’s record of $487 billion. But MBA anticipates borrowing and lending to recover in 2023 to $872 billion in total commercial real estate lending and $454 billion in multifamily lending.

“Most commercial real estate market fundamentals remain strong, with significant increases in the incomes and values of many properties in recent years,” Woodwell said. “These factors are why MBA expects loan demand to begin to bounce back in 2023 and 2024.

Read more: Commercial real estate breezes through first half of 2022

JPMorgan Chase’s midyear outlook on the commercial and multifamily industry was also positive. Commercial property price appreciation rose at an 18.6% pace in May, while the annual growth rate for apartment prices reached an all-time high of 23.3%.

However, Woodwell warned that if a recession were to happen – which would most likely come in the first half of 2023, “commercial and multifamily borrowing and lending would likely be further constrained.”