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After a slowdown for commercial and multifamily borrowing and lending last year, increased activity is expected for 2024. According to an updated baseline forecast from the Mortgage Bankers Association (MBA), borrowing and lending is expected to rise to $576 billion, a 29% increase from last year’s estimated $444 billion.

For multifamily lending alone, MBA forecasts $339 billion for 2024, a 25% increase from last year’s estimate of $271 billion.

“2023 is likely to go into the record books as the slowest year for commercial real estate borrowing and lending in roughly a decade,” said Jamie Woodwell, MBA’s head of commercial real estate research. “As the markets reset—on interest rates, property values, some property fundamentals, and other factors—those volumes should pick up marginally. While up from last year’s levels, we still expect borrowing and lending to be below what was seen going back to 2017.”

Woodwell added that commercial mortgage originations historically have followed property prices, and the uncertainty around interest rates has played a role in the slowdown.

“If interest rates and cap rates were to fall, that should help boost values and promote borrowing. If they remain higher for longer, that will suppress activity,” he explained. “This uncertainty is a contributing factor in today’s slowdown.”

For 2025, the MBA expects commercial real estate borrowing and lending to increase to $717 billion, with multifamily comprising $404 billion of that total.