Marketpulse Data: Commercial And Multifamily Mortgage Debt Outstanding Increased

The level of commercial/multifamily mortgage debt outstanding increased by $47.7 billion (1.0 percent) in the third quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report.

Total commercial/multifamily mortgage debt outstanding rose to $4.75 trillion at the end of the third quarter. Multifamily mortgage debt alone increased $29.8 billion (1.4 percent) to $2.12 trillion from the second quarter of 2024.

”Every major capital source for commercial mortgage debt increased its holdings of mortgages during the third quarter of 2024,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “Life insurance companies led the way, accounting for 44 percent of the quarterly increase and boosting their commercial mortgage holdings by nearly three percent. That increase contrasts with banks, which increased their balances of CRE mortgages during the quarter by only 0.3 percent. For the ninth quarter in a row, aggregate balances backed by multifamily properties increased more than those backed by other property types.”

The four largest investor groups are: banks and thrifts; federal agency and government sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS); life insurance companies; and commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset-backed securities (ABS) issues.

Commercial banks continue to hold the largest share (38 percent) of commercial/multifamily mortgages at $1.8 trillion. Agency and GSE portfolios and MBS are the second-largest holders of commercial/multifamily mortgages (22 percent) at $1.03 trillion. Life insurance companies hold $757 billion (16 percent), and CMBS, CDO and another other ABS issues hold $619 billion (13 percent). Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the report in the “CMBS, CDO and other ABS” category.

MBA’s analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in CMBS, CDOs and other ABS for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).

MULTIFAMILY MORTGAGE DEBT OUTSTANDING

Looking solely at multifamily mortgages in the third quarter of 2024, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $1.03 billion (49 percent), followed by banks and thrifts with $630 billion (30 percent), life insurance companies with $244 billion (12 percent), state and local government with $99 billion (5 percent), and CMBS, CDO and other ABS issues holding $68 billion (3 percent).

CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING

In the third quarter, life insurance companies saw the largest gains in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $21.2 billion (2.9 percent). Agency and GSE portfolios and MBS increased their holdings by $12.3 billion (1.2 percent), CMBS, CDO and other ABS issues increased their holdings by $9.6 billion (1.6 percent), and bank and thrifts increased their holdings by $6.1 billion (0.3 percent).

In percentage terms, life insurance companies saw the largest increase – 2.9 percent – in their holdings of commercial/multifamily mortgages. Conversely, private pension funds saw their holdings decrease 8.8 percent.

CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING

The $29.8 billion increase in multifamily mortgage debt outstanding from the second quarter of 2024 represents a quarterly gain of 1.4 percent. In dollar terms, agency and GSE portfolios and MBS issues saw the largest gain – $12.3 billion (1.2 percent) – in their holdings of multifamily mortgage debt. Life insurance companies increased their holdings by $10.0 billion (4.3 percent), and bank and thrifts increased by $4.7 billion (0.8 percent).

Life insurance companies saw the largest percentage increase in their holdings of multifamily mortgage debt, up 4.3 percent. Private pension funds saw the largest decline in their holdings of multifamily mortgage debt at 6.8 percent.

MBA’s analysis is based on data from the Federal Reserve Board’s Financial Accounts of the United States, the Federal Deposit Insurance Corporation’s Quarterly Banking Profile, and data from Trepp LLC.