Commercial mortgages in the United States down 34% in 2020

Based on a new forecast released this week by the Mortgage Bankers Association, commercial and multi-family mortgage bankers are expected to close $ 395 billion in income-generating property-backed loans in 2020, down 34% from the previous year. 2019 record volume of $ 601 billion.

Total multi-family loans alone, which includes some loans from small and medium-sized banks not counted in the overall total, is expected to fall 21 percent to $ 288 billion in 2020 from the record total of 364. billion dollars from last year. MBA predicts a slight increase in loan volumes in 2021, with activity reaching $ 407 billion in commercial / multi-family mortgage bank arrangements and $ 305 billion in total multi-family loans.

“There remains a great deal of uncertainty regarding the pandemic and its impacts on the economy and commercial real estate, with significant differences across types of ownership and sources of capital,” said Jamie Woodwell, vice president of MBA for commercial real estate research. “The slowdown is putting downward pressure on some real estate income, in particular the types of property most affected by the pandemic or with shorter lease terms. With interest rates and low investment returns, property values ​​should hold up better, which should help put a floor under sales and origination volumes this year and next. “

Woodwell added, “In the first three quarters of 2020, multi-family sales volume was 41% lower than the previous year, with multi-family fixtures down just 17%. FHA loans elevate overall origination activity to where it might otherwise be and result in differences in types of properties and sources of capital. These contrasts are likely to remain strong. “