Commercial mortgage sector gained $200 billion in 2018

by Steve Randall21 Mar 2018

The amount of commercial/multifamily mortgage debt outstanding in 2017 was $3.18 trillion.

The Mortgage Bankers Association says that more than $200 billion of debt was added to the total during the year, a rise of 6.7% from the end of 2016.

In the fourth quarter, $73.6 billion (2.4%) was added to the total as all four major investor groups increased their holdings.

Multifamily mortgage debt outstanding rose to $1.26 trillion, up $41.6 billion (3.4%) from the third of quarter of 2017.

"Commercial and multifamily mortgage debt outstanding continued to grow in 2017, albeit at a slightly slower rate than overall property values," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.

He added that despite the slower pace, 2017 marked the strongest year for mortgage debt growth since 2007, with Fannie Mae, Freddie Mac and FHA leading the market, followed by banks, life companies and real estate investment trusts.

“The commercial mortgage-backed securities (CMBS) market, which saw a decline for the year as a whole, turned a corner and added $9 billion during the fourth quarter," said Woodwell.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $1.3 trillion (40% of the total); Agency and GSE portfolios and MBS hold $606 billion (19%); Life insurance companies hold $468 billion (15%); and CMBS, CDO and other ABS issues hold $441 billion (14%).

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