Commercial Real Estate News
U.S. Commercial Borrowing to Increase to $583 Billion in 2025, Up 16 Percent Annually
The Mortgage Bankers Association released an updated forecast this week projecting that U.S. commercial and multifamily mortgage borrowing and lending will reach $583 billion in 2025, marking a 16% increase from the estimated $503 billion in 2024.
Multifamily lending, a segment included in the overall figures, is expected to rise to $361 billion in 2025 -- also a 16% increase from the 2024 estimate of $312 billion. By 2026, MBA forecasts total commercial real estate lending to reach $709 billion, with $419 billion attributed to multifamily loans.
"There are still plenty of challenges in commercial real estate, but there are also signs of stabilization," said Mike Fratantoni, MBA's SVP and Chief Economist. "Given the strong pickup in origination activity at the end of 2024, it appears that some borrowers and lenders are ready to move forward. MBA expects interest rates to remain within a trading range over the next few years. With abundant capital available and potential rate declines similar to those at the end of 2024, we anticipate borrowers and lenders will seize opportunities."
Fratantoni noted that various factors will continue to drive interest rate volatility. MBA predicts slower economic growth and a slightly weaker job market in the coming years.
"Given our outlook for interest rates and the broader economy, we foresee growth in commercial mortgage originations over the next two years," Fratantoni added. "While originations across property types and capital sources are expected to rise, we acknowledge the additional challenges posed by the significant number of loans set to mature in 2025."
