The lending environment for multifamily properties showed meaningful improvement during Q3. Multifamily loan spreads tightened by 27 basis points year-over-year to 141 basis points, driven primarily by lower agency loan spreads.
Government-sponsored enterprise (GSE) lending increased dramatically in Q3. Agency origination volume jumped 53 percent quarter-over-quarter and 57 percent year-over-year to $44.3 billion. The average GSE fixed mortgage rate for closed permanent loans with seven-to-ten-year terms fell 13 basis points during the quarter and 27 basis points year-over-year to 5.6 percent.
Multifamily loans spreads have diverged from the rest of commercial property loans:
While investment volumes rose, multifamily property valuations did not. The MSCI Commercial Property Price Index showed multifamily as the only major sector experiencing year-over-year price declines, with values down 0.8 percent in September 2025 compared to the previous year. The index was down 19 percent from its 2022 peak.
Multifamily Market News 