Multifamily residential lending volume dropped 49 percent last year, according to the Mortgage Bankers Association’s (MBA) annual report on the health of the multifamily market. The report analyzed survey results with data from larger multifamily mortgage providers and recently reported Home Mortgage Disclosure Act (HMDA) data, covering multifamily loans by commercial banks and other smaller lenders.
The multifamily sector issued $246.2 billion in new mortgages for apartment buildings with five or more units in 2023, spread across 2,520 different lenders. Slightly over half of the active lenders assessed for the report made five or fewer multifamily loans throughout the year.
“Multifamily lending fell by roughly half in 2023 as sales transactions declined and far fewer property owners sought to refinance their loans,” MBA Head of Commercial Real Estate Research Jamie Woodwell said in a statement. “The analysis shows that even with the drop in activity, 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 largest share of multifamily mortgages (42 percent) by dollar amount went to government sponsored enterprises Fannie Mae and Freddie Mac. The top five multifamily lenders in 2023 by dollar volume were Berkadia, Walker & Dunlop, JP Morgan Chase & Co., CBRE, and Greystone.
The MBA report provided a comprehensive view of the multifamily lending market and included:
- A detailed summary of the $246.2 billion multifamily market;
- Profiles of distinct market segments, including the very-small loan (loans of $1 million or less) lender segment;
- A breakout of 2023 multifamily lending volume by investor group;
- A listing of 2,520 lenders who made multifamily loans in 2023, including their lending volume, number of loans made and average loan size; and
- A listing of metropolitan areas and the volume of very-small loans made in each in 2023.
The report is based on data from the MBA 2023 Commercial Multifamily Annual Origination Volume Summation and HMDA. The MBA survey targeted dedicated commercial/multifamily originators and covered $306 billion in commercial/multifamily loans in 2023. The HMDA data added multifamily loans from banks, thrifts and other institutions that meet certain single-family origination thresholds. When combined, the two datasets provided the most comprehensive assessment of the multifamily lending market available, MBA noted on its website.