Commercial and multifamily mortgage borrowing and lending is expected to make a major jump this year and next, with total originations rising 16% to $583 billion for 2025, and then increasing to $709 billion in 2026, according to the Mortgage Bankers Association (MBA).
Multifamily lending alone is forecast to reach $361 billion this year, 16% higher than 2024’s estimate of $312 billion. Commercial mortgages are expected to increase to $222 billion. For 2026, multifamily lending is expected to rise to $419 billion and commercial lending should increase to $290 billion. The estimates are an updated baseline forecast released by the MBA at the 2025 Commercial/Multifamily Finance Convention and Expo in San Diego.
Commercial real estate has been experiencing improved mortgage-lending levels in recent months. For the fourth quarter of 2024, commercial and multifamily mortgage loan originations were 30% higher than in the third quarter and a whopping 84% higher than one year earlier.
“There are still plenty of challenges in commercial real estate, but there are also signs of stabilization,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Given the strong pickup in origination activity at the end of 2024, it appears that at least some borrowers and lenders are ready to move. MBA is forecasting that interest rates are going to stay within a trading range for the next few years. With abundant capital ready to be deployed, and if rates decline as they did at the end of 2024, we fully expect that borrowers and lenders will jump on any opportunities.”
Despite the positive outlook, Fratantoni said there are factors that will continue to cause volatility for mortgage rates. MBA forecasts a slight slowdown in economic growth with a somewhat weaker job market in the coming years.
“Given our forecast for interest rates and the broader economy, MBA is forecasting growth in commercial mortgage originations in the next two years,” he said. “We expect an increase in originations across property types and capital sources, but certainly recognize the additional challenges posed by the large number of loans scheduled to mature in 2025.”
