US commercial, multifamily mortgage lending expected to rise year-over-year in 2014; lenders' appetite to place new loans expected to exceed borrowers' appetite for taking out new loans, increasing competition among lenders: MBA
January 8, 2014
– Commercial and multifamily mortgage lending is expected to increase in 2014, as lenders’ appetites to place new loans grow even stronger, according to a new Mortgage Bankers Association survey of the top commercial and multifamily mortgage origination firms. Lenders were also polled on their expectations for borrower appetites in the New Year. A full 91 percent of the top firms expect originations to increase in 2014, with 48 percent expecting an increase of 5 percent or more. Almost two-thirds (64 percent) expect their own firm’s originations to increase by 5 percent or more.
“Commercial and multifamily lenders anticipate a market in which lending continues to grow and their firm gets a bigger piece of the pie,” said Jamie Woodwell, MBA’s Vice President for Commercial Real Estate Research. “Borrowers’ appetites to take out new loans are expected to remain strong, but perhaps drop a bit from 2013 levels. The resulting competition to lend leads originators to expect loan risk to increase marginally in the face of moderating returns.”
A majority of respondents expect originations for commercial mortgage backed securities (CMBS), commercial banks and life companies and pension funds to increase, and for originations for Fannie Mae, Freddie Mac and FHA to decrease. 65 percent anticipate a “very strong” appetite among firms to make loans and 23 percent anticipate a “very strong” appetite among borrowers to take out loans. Lenders were surveyed on a scale of “very weak, weak, fair, strong, or very strong.”
Specific findings include:
The 2014 MBA CREF Outlook Survey was conducted between December 11 and December 20, 2013. The Survey request was sent to leaders of 50 of the top commercial/multifamily mortgage origination firms, as determined by MBA’s 2012 Annual Origination Rankings Report. The survey had a response rate of 64 percent. Percentages shown are calculated based on applicable responses. Non-responses and “n.a.” responses are excluded from the percentage denominator.
Detailed survey results are available to commercial/multifamily members of the Mortgage Bankers Association at www.mba.org/research.
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site: www.mba.org.