The commercial and multi-family lending markets are expected to experience strong growth in 2021. Mortgage maturity volumes are expected to increase by 36% this year, according to a new Mortgage Bankers Association report, while commercial and multi-family loans are expected to increase. by 11%.
Commercial and multi-family mortgage bankers are expected to close $ 486 billion this year – an increase from the $ 440 billion in loan volumes closed in 2020 – with multi-family loans driving the growth. The industry alone is expected to grow 7% this year, up to $ 323 billion in 2021. By comparison, multi-family lending activity totaled $ 302 billion in 2020.
This is likely the start of the recovery for credit markets after a dismal performance in 2020 due to the pandemic. “The sharp drop in loans and mortgages observed in 2020 should be partially reversed in 2021. The economic rebound forecast by MBA in the second half of the year should bring greater stability to the markets, but with continued differentiation by type of property”, Jamie Woodwell, MBA’s vice president for commercial real estate research, said in the company’s forecast report.
The deadlines will also increase this year. This year, 10% or $ 223 billion of the total $ 2.3 trillion in commercial mortgage debt is expected to mature this year. This is a 36% increase in loan maturities from 2020, when maturities totaled $ 163.2 billion.
There is no clear trend in which capital segments will see the bulk of these maturities. Multi-family and healthcare mortgages held by Fannie Mae, Freddie Mac, FHA and Ginnie Mae account for 1% of total maturities; life insurance companies hold a total of 6% of maturities or $ 39.8 billion; and 16% of CMBS loans mature. “Commercial and multi-family mortgage maturities among non-bank lenders are the highest since at least 2009,” said Woodwell. “Many life insurance company, GSE and FHA loans that should have matured this year have been refinanced or prepaid. These declines were more than offset by shorter-term loans with maturity dates of 2021 from CMBS and investor-focused lenders. “
This is a promising outlook given the low bar set by the market last year. In December, CMBS delinquencies were still on the rise, aAccording to an MBA year-end report, with 5.7% of commercial mortgages past due in November, up from 5.4% in October.