MBA-CREF Special Report: Lending Grows Amid ‘Complexities’

Origination figures released yesterday by the Mortgage Bankers Association show lending is rebounding despite higher-for-longer rates and global and domestic uncertainties.  

In MBA’s Commercial/Multifamily Mortgage Originations Index, Q4 2024 originations were 84 percent higher than Q4 2023’s and 30 percent more than last year’s Q3. MBA’s preliminary estimates show volume for the year rose 39 percent versus 2023. Set to exceed $500 billion when the numbers are finalized in April, 2024 originations came close to 2022 originations of $560 billion.

Originations are still not at the level they were in 2021 (nearly $700 billion), “but they were definitely higher than 2023” when less than $300 billion was originated, said Reggie Booker, MBA associate vice president Commercial/Multifamily Research, during the MBA-CREF conference San Diego.

After a slow first half of the year, borrowing picked up in Q3 and continued to grow for the rest of the year. For Q4, MBA found that every property type saw a year-over-year increase from Q3 2024: office (up 105 percent), industrial (up 94 percent), multifamily properties (up 69 percent) and retail (up 48 percent).

For 2025, MBA forecasts a 16 percent increase over 2024 originations. Of that, $361 billion will be multifamily—also a 16 percent increase. In 2026, originations are expected to exceed $700 billion with more than $400 million of that being multifamily.

A complex backdrop

Despite the progress, the industry is still facing a number of challenges, MBA Chief Economist & Senior Vice President of Research & Business Development Mike Fratantoni told executives during his economic outlook presentation.

In 2025, $957 billion or 20 percent of the $4.7 trillion in outstanding CRE mortgages are set to mature. With that, there will be a significant amount of distress transactions as well as a lot of opportunity for mortgage executives.

But a “very, very complex” macroeconomic environment—including a weakening global economy, slower U.S. growth and looming trade wars—are expected to keep the 10-year Treasury, CRE’s key benchmark, trading between 4 and 5 percent for this year. “By the end of the year, I expect we’re not going to be in much of a different place than we are today for at a (4.5 percent) 10-year,” the economist said,

Fratantoni told executives to “be on their toes” when rates fluctuate to the lower end of 4 percent: “As we saw in September, October last year, when you get that moment where rates drop to the lower end of that range, you got to be ready to go because I don’t think it’s going to last very long.”