According to newly released data from the Mortgage Bankers Association, outstanding commercial and multifamily mortgage debt climbed to a record high of $3.32 trillion in the third quarter, topping the previous high of $3.27 trillion, which was set in the previous quarter.
Outstanding commercial and multifamily mortgage debt rose by 1.4% during the quarter, with multifamily debt increasing by $26.1 billion (or 2%) to $1.3 trillion. (Of note, commercial and multifamily mortgage delinquencies are at historic lows.)
According to MBA Vice President of Commercial Real Estate Research Jamie Woodwell, each of the four major lender groups (bank and thrift; federal agency and government-sponsored enterprise portfolios and mortgage-backed securities; life insurance companies; and commercial mortgage-backed securities, collateralized debt obligation and other asset-backed securities issues) added to the balance of loans they hold during the third quarter.
“Favorable commercial real estate fundamentals and strong lender demand pulled commercial and multifamily mortgage debt outstanding to a new high,” Woodwell said. “Multifamily mortgage debt continues to lead the pack, accounting for more than half of the total increase, and Fannie Mae, Freddie Mac and FHA remain the key drivers of multifamily mortgage growth.”
MBA’s report showed that commercial banks continue to hold the largest share (40%) of commercial/multifamily mortgages at $1.3 trillion.
The $26.1 billion increase in outstanding multifamily mortgage debt from the second to third quarter equates to a 2% increase. Agency and GSE portfolios and MBS saw the largest gain, rising by $16.7 billion (2.6%). Commercial banks increased their holdings by $7.1 billion (1.7%); while CMBS, CDO and other ABS issues increased by $2.6 billion (6.4%). On the other hand, state and local government saw the largest decline in their holdings of multifamily mortgage debt, down $2 billion (2.3%).