Annual commercial mortgage lending is again expected to expand this year, with the outlook most optimistic for government-sponsored enterprise activity.
Back in October, the Mortgage Bankers Association
predicted that commercial real estate loan originations would total $515 billion during all of 2017.
The forecast, which included commercial mortgages and multifamily production, was a nearly 5 percent improvement over CRE loan originations during 2016.
A survey reported
Thursday by the Washington-based trade group indicated that more than three-quarters of CRE lenders — 78 percent — expect production to increase this year.
The survey, which leaders of around 30
of the top commercial mortgage banking firms participated in, revealed that 22 percent of the firms expect an increase of at least 5 percent across the entire market.
Nearly half of the executives predicted their own
companies will see an increase of at least 5 percent during 2018.
Growth of at least 5 percent was expected by nearly a quarter of respondents for Fannie Mae and Freddie Mac multifamily originations. For commercial mortgage-backed securities, 23 predicted growth, while the share was 17 percent for FHA lending and 12 percent each for banks and life insurers.
“The majority of top firms expect a ‘very strong’ appetite from lenders and a ‘strong’ appetite from borrowers to drive commercial mortgage originations higher,” MBA Vice President for Research and Economics Jamie Woodwell said in the report. “Tax reform and regulatory relief are expected to benefit the overall market, though rising rates are expected to be a drag.
“The outlook mirrors much of what we saw in their 2017 outlook.”
