Commercial and multifamily mortgage activity ended 2025 with robust growth, according to updated quarterly figures from the Mortgage Bankers Association (MBA).
Origination volumes were 30% higher over the year in the fourth quarter of 2025 and 25% higher than the previous quarter, capping a “much stronger year” than 2024 for commercial and multifamily mortgage lending.
“Higher origination volumes in the fourth quarter point to improving conditions in commercial mortgage markets, though activity remains uneven across property types,” said Reggie Booker, associate vice president of commercial and multifamily research at MBA, in a statement accompanying the updated figures.
Greater interest-rate stability and “clearer pricing expectations” were cited as macroeconomic shifts driving the yearly rebound. Office, multifamily, industrial and health care properties led the fourth-quarter gains.
Originations for office properties, specifically, saw a 95% annual increase by dollar volume, compared to a 23% increase for industrial properties, 22% increase for multifamily properties and a 20% increase in originations by dollar volume for health care properties.
Retail property and hotel property originations saw respective slumps of 12% and 34% compared to the fourth quarter of 2024.
The lending growth was predominantly fueled by depositories, with 74% higher originations by dollar volume in the fourth quarter, followed by 46% growth for investor-driven lenders and just 5% and 4% growth for commercial mortgage-backed securities and loans from government-sponsored enterprises Fannie Mae and Freddie Mac.
On a quarterly basis, however, office property originations decreased 1% while multifamily originations were 17% higher and industrial properties were 29% higher.
Stagnating rent growth and stubbornly high financing costs are not projected to slow a steady post-pandemic recovery, however.
MBA projections from January show that the multifamily market grew by nearly 15% to exceed $330 billion in 2025, and it is projected to grow by another 20% to around $400 billion in 2026, growth that Fannie Mae and Freddie Mac are positioning themselves to support.
While robust growth is not projected past 2026, the MBA forecasts multifamily production to settle around $390 billion through 2027 and 2028. A preliminary measure of commercial mortgage volumes across all property types shows activity in 2025 was 40% higher than 2024.
