Analyst highlights a silver lining in the results
The volume of multifamily lending across the US saw a decline in 2023, dropping 49% to $246.2 billion, according to the Mortgage Bankers Association (MBA) annual report. This reduction reflects a significant slowdown in both sales transactions and refinancing activities within the multifamily property sector.
“Multifamily lending fell by roughly half in 2023 as sales transactions declined and far fewer property owners sought to refinance their loans,” said Jamie Woodwell, MBA’s head of commercial real estate research.
Despite the downturn, Woodwell highlighted that the market remains extensive, with diverse participation across numerous lenders. “The multifamily lending market remains broad and deep, with more than 2,500 different lenders making more than 36,000 mortgage loans backed by multifamily properties in amounts ranging from tens of thousands of dollars to hundreds of millions.”
The report has outlined that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac absorbed the largest portion of the multifamily loan volume, accounting for 42% of the total amount. The top five lenders in this sector by dollar volume were Berkadia, Walker & Dunlop, JP Morgan Chase & Company, CBRE, and Greystone.
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In addition to providing a comprehensive summary of the multifamily lending landscape, the MBA report includes detailed profiles of market segments, such as the very-small loan category (loans of $1 million or less). It also offers insights into lending volumes by investor group and lists metropolitan areas with significant volumes of very-small loans.
The MBA’s report and the HMDA data collectively offer a thorough assessment of the multifamily lending market, including information on loan sizes, lending volumes, and the number of loans issued by various institutions. The data highlights both the scale and scope of the multifamily lending industry despite the notable reduction in activity.
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