The commercial and multifamily lending market is poised for significant growth in 2025, with borrowing and lending expected to increase by 16% year-over-year. According to the Mortgage Bankers Association (MBA), total commercial and multifamily mortgage originations are forecasted to reach $583 billion in 2025, up from an estimated $503 billion in 2024.
Multifamily lending, which is included in the total figures, is also expected to rise by 16%, reaching $361 billion in 2025 compared to $312 billion the previous year. Looking ahead, MBA anticipates continued momentum in 2026, projecting $709 billion in total commercial real estate lending, with $419 billion dedicated to multifamily loans.
Signs of Stabilization in Commercial Real Estate
While challenges remain in the commercial real estate sector, the outlook suggests increasing stability and renewed activity.
“There are still plenty of challenges in commercial real estate, but there are also signs of stabilization,” said Mike Fratantoni, Ph.D., MBA’s SVP and Chief Economist. “Given the strong pickup in origination activity at the end of 2024, it appears that at least some borrowers and lenders are ready to move.”
Fratantoni also highlighted the role of interest rates in driving lending activity, noting that rates are expected to remain within a trading range for the foreseeable future.
“MBA is forecasting that interest rates are going to stay within a trading range for the next few years. With abundant capital ready to be deployed, and if rates decline as they did at the end of 2024, we fully expect that borrowers and lenders will jump on any opportunities,” added Fratantoni.
Market Outlook and Economic Factors
Despite optimism for lending growth, Fratantoni cautioned that market conditions remain fluid, with economic and employment trends playing a key role.
“Given our forecast for interest rates and the broader economy, MBA is forecasting growth in commercial mortgage originations in the next two years,” said Fratantoni. “We expect an increase in originations across property types and capital sources, but certainly recognize the additional challenges posed by the large number of loans scheduled to mature in 2025.”
While economic growth is expected to slow and the labor market may weaken slightly, MBA anticipates that capital availability and borrower demand will help sustain lending activity across commercial real estate sectors.
As 2025 unfolds, market participants will closely watch interest rate trends, loan maturities, and evolving economic conditions to gauge further opportunities in the lending space.
