Total multifamily and commercial mortgage originations are expected to decrease from last year's levels because of economic uncertainty, according to the Mortgage Bankers Association.
The MBA said Wednesday that it projects originations of commercial and multifamily mortgages will total $500 billion in 2016, down slightly from the $504 billion originated in 2015 and less than the record $508 billion originated in 2007.
Additionally, the trade group predicted that mortgage banker originations of multifamily mortgages will hit $210 billion in 2016, with total multifamily lending at $273 billion.
But while origination volume may be down a bit from last year, debt outstanding is still expected to grow. The MBA projected that commercial and multifamily mortgage debt outstanding will reach $2.9 trillion, an increase of more than 3% from 2015.
Strong property prices are expected to buoy the commercial and multifamily market, said Jamie Woodwell, the MBA's vice president of commercial real estate research, in a news release. But that doesn't mean the market's in the clear.
"Global economic uncertainty and a range of regulations that could affect the availability of CRE financing remain wild cards," Woodwell said. "On the supply side, solid originations for life companies, Fannie Mae, Freddie Mac and bank portfolios are expected to make-up for some — but not all — of the slowdown in the commercial mortgage-backed securities market this year."
