In the first quarter of 2026, originations of new mortgages for commercial and multifamily real estate rose by 52% relative to the same period in 2025, as detailed in the Mortgage Bankers Association's latest quarterly report on commercial and multifamily lending.
Depository lending - loans from traditional banks - was up 80 percent year-over-year. According to Reggie Booker, an associate vice president of commercial research at the MBA, "The most notable increase was the 80 percent rise in depository lending, driven in part by the large volume of bank-held loans maturing this year and the need to refinance those positions."
Investor-driven lenders saw a 133 percent year-over-year increase. Government-sponsored enterprises (Fannie Mae and Freddie Mac) rose 38 percent, life insurance company loans increased 9 percent, and commercial mortgage-backed securities (CMBS) loans decreased 14 percent.
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The surge in lending comes as a wave of commercial real estate loans originated in previous years reaches maturity, particularly those held by banks. With interest rates still elevated compared to historic lows, borrowers are seeking refinancing to manage upcoming payments. The MBA's data suggests that banks are actively accommodating these needs, contributing to the sharp increase in depository lending. Meanwhile, the seasonal downturn in the first quarter is a well-known pattern, as transaction activity often slows after the year-end rush.
This refinancing activity is concentrated among loans originated in the low-rate environment of 2020-2022, many of which are now maturing. With the Federal Reserve's interest rate hikes still weighing on borrowing costs, lenders are working to extend or modify existing loans rather than foreclose. The MBA's data indicates that banks are leading this effort, accounting for a significant portion of the year-over-year increase. This trend is expected to continue as more loans come due throughout 2026.
Compared to a year earlier, healthcare property originations increased 209 percent, retail properties rose 148 percent, hotel properties increased 85 percent, industrial properties rose 56 percent, and multifamily properties increased 49 percent. Office lending fell by 2% when measured against the final quarter of 2025.
Quarter-over-quarter, originations in Q1 2026 were 30% lower than in Q4 2025. Among property types, multifamily originations fell 28 percent, office fell 28 percent, industrial fell 28 percent, and retail fell 5 percent. Hotel originations increased 3 percent, and healthcare lending, meanwhile, rose 70% relative to the previous quarter.
Breaking down by investor type, from Q1 2026 to Q4 2025, depository loans dropped 37%, life insurance company loans fell 36%, GSE originations declined 35%, CMBS loans slipped 23%, and investor-driven lender loans decreased 18%.
Booker noted: "While overall activity declined from the fourth quarter of 2025, that slowdown is consistent with typical first-quarter seasonality and does not detract from the broader improvement in market conditions."
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