January 13, 2020
With 2019 already projected to be a record year for commercial and multifamily mortgages, lenders are expecting 2020 to be even busier. Sixty-four percent of commercial and multifamily mortgage originators expect deal volume to increase this year, according to the Mortgage Bankers Association’s (MBA) 2020 Commercial Real Estate Finance (CREF) Outlook Survey.
About one in six lenders (16%) expect an overall increase of 5% or more across the entire market. When forecasting just their own firm’s originations, 42% expect an increase of 5% or more in lending in 2020.
“Buoyed by low interest rates, strong property markets and rising property values, commercial and multifamily mortgage banking firms expect a solid year in 2020,” said Jamie Woodwell, MBA’s VP commercial real estate research. “Most anticipate strong appetites from lenders and borrowers, and expect overall levels of mortgage borrowing and lending to increase.”
He added, though, “That’s not to say there aren’t some challenges and headwinds firms are monitoring.” Among these potential stumbling blocks are concerns about changes in the demand for space, and issues such as the adoption of the Financial Accounting Standards Board’s new Current Expected Credit Losses standard, or the move away from LIBOR.
MBA recently issued its latest CREF forecast that projects a record $683 billion of loans backed by income-producing properties in 2020. That’s a 9% increase from 2019’s anticipated record volume of $628 billion.
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