WASHINGTON, DC (May 9, 2024) — Commercial and multifamily mortgage lending was little changed in the first quarter of 2024 compared to the same period a year ago and down 23% from the fourth quarter of 2023, according to the Mortgage Bankers Association’s (MBA) quarterly Commercial and Multifamily Mortgage Lending Survey.
“Commercial real estate secured borrowing and lending remained weak in the first quarter of 2024,” said Jamie Woodwell, MBA's head of commercial real estate research. “Rising interest rates and uncertainty about their direction have many current owners holding back, and few are recommending selling or refinancing unless something forces them to.”
Woodwell added, “As loan maturities and other factors increasingly prompt action, property owners, potential owners, lenders and other interested parties are reviewing the details of each property to determine the level of mortgage debt the property can bear. As this situation continues, new loan originations should continue.”
Origin of Q1 2024 remains unchanged
Lending volumes in the first quarter of 2024 varied by property type. Retail property lending volumes were down 31% year over year, medical property lending volumes were down 22%, office property lending volumes were down 21%, and multifamily property lending volumes were down 7%. Hotel property lending volumes increased 8%, and industrial property lending volumes increased 63%.
By investor type, dollar value of loans to depository institutions decreased 41% year over year. Loans to government-sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) decreased 17%, while loans to life insurance companies increased 35%, loans to investor-sponsored lenders increased 41%, and the dollar value of loans to commercial mortgage-backed securities (CMBS) increased 93%.
Loan volume in Q1 2024 will be 23 percent lower than Q4 2023
On a quarterly basis, healthcare loan volume was down 56% in Q1 2024 compared to Q4 2023. Retail loan volume was down 49%, hotel loan volume was down 37%, multifamily loan volume was down 29%, office loan volume was down 3%, and industrial loan volume was up 12%.
By investor type, life insurance company loan dollar value decreased 37% between the fourth quarter of 2023 and the first quarter of 2024, depository institution loans decreased 36%, government sponsored institution loans decreased 30%, and investor-sponsored lender loans decreased 18%. CMBS loan dollar value increased 57%.