The Mortgage Bankers Association (MBA), based in Washington, D.C., sees a bright future for the rest of the year. It is forecasting that commercial and multifamily mortgage bankers will close a record $652 billion of loans backed by income-producing properties this year, 14% higher than last year's record volume of $574 billion. Total multifamily lending, which includes loans made by small and midsize banks, is forecast to rise to $359 billion, which is also a record and is 6% higher than last year's record total of $339 billion.
More good news is predicted for 2020 as MBA is forecasting rising volumes reaching $700 billion of commercial/multifamily mortgage banker originations and $390 billion of total multifamily lending.
"The low interest rate environment, coupled with continuously strong demand for commercial and multifamily assets, has pushed property values higher and increased demand for mortgages," said Jamie Woodwell, MBA's vice president for commercial real estate research. "At the beginning of the year, many economists, investors, and others anticipated long-terms rates would be around 3% and rising—potentially putting pressure on property values and decreasing demand for debt. Instead, the 10-year Treasury yield is at approximately 1.5%, and many market participants are planning for rates to remain 'lower for longer.' The result is heightened demand and higher volumes."
MBA’s new forecast is more optimistic than earlier projections due to low interest rates and new data indicating that banks lent considerably more in multifamily mortgages in 2018 than previously estimated—making more than $100 billion in multifamily loans. MBA now assesses last year’s multifamily lending market at $339 billion.
MBA has also released its midyear rankings of commercial and multifamily mortgage servicers' volumes as of June 30. At the top of the list of firms is Wells Fargo Bank with $681.8 billion in master and primary servicing, followed by PNC Real Estate/Midland Loan Services at $655.2 billion, KeyBank National Association with $273.1 billion, Berkadia Commercial Mortgage at $268.4 billion, and CBRE Loan Services with $208.3 billion.