Commercial, multifamily mortgage debt reaches all-time high

by Francis Monfort17 Dec 2018

Total commercial and multifamily debt outstanding reached an all-time high in the third quarter after rising by $45.4 billion (1.4%), according to the Mortgage Bankers Association (MBA).

Debt outstanding increased to $3.32 trillion in the third quarter, surpassing the previous high of $3.27 trillion in the second quarter. Over the same period, multifamily mortgage debt increased $26.1 billion (2%) to $1.3 trillion.

"Favorable commercial real estate fundamentals and strong lender demand pulled commercial and multifamily mortgage debt outstanding to a new high," said Jamie Woodwell, MBA's vice president of commercial real estate research. "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. All four of the major lender groups added to the balance of loans they hold.”

Among the four major investor groups, commercial banks continued to hold the largest share (40%) of commercial/multifamily mortgages at $1.3 trillion. The second largest holders of commercial/multifamily mortgages were agency and GSE portfolios and MBS with $648 billion (20%). Life insurance companies hold $497 billion (15%), and CMBS, CDO, and other ABS issues hold $458 billion (14%).