The U.S. commercial real estate lending market experienced a strong rebound by the end of 2025, driven by reduced interest rate volatility and a robust return of banks to financing activity, which helped restore confidence among lenders and investors.
Commercial and multifamily residential mortgage lending increased by 30% year over year in the fourth quarter and by 25% compared to the previous quarter, signaling a broad recovery after weak performance in 2024.
Banks led the financing landscape, with their lending volumes surging by 74%, outperforming other funding sources. Investor-backed lenders and insurance companies recorded more modest gains, while growth in commercial mortgage-backed securities remained limited.
Across sectors, office properties posted the largest annual jump, rising by 95%, followed by industrial real estate, multifamily housing, and healthcare properties. In contrast, lending for retail and hotel properties declined, reflecting continued investor caution toward sectors tied to consumer spending and travel.
Overall, total commercial real estate lending rose by 40% in 2025, marking one of the strongest recovery rates since the COVID-19 pandemic. Improved financing availability played a key role, and the sustainability of this momentum in 2026 will depend on broader economic performance and the stability of borrowing costs.
