In the third quarter of 2023, commercial and multifamily mortgage loan originations experienced a significant decrease of 49% compared to the previous year. This data was revealed in the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, which was released on Tuesday.
According to Jamie Woodwell, MBA’s head of commercial real estate research, borrowing supported by commercial properties saw a decline for all property types and capital sources when compared to one year ago. However, there was some stability in volume when comparing this quarter with Q2. Additionally, certain sectors such as industrial properties and life company lenders showed an increase in volume.
Woodwell also noted that CRE mortgage borrowing has decreased by 44% so far this year due to concerns about property fundamentals and values as well as fluctuating interest rates. He believes that greater certainty surrounding these conditions is necessary for transaction activity to pick up again.
The decrease in CRE mortgage volume highlights current challenges facing the industry but also presents opportunities for improvement moving forward.
