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 latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report, released recently.
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. Life insurance companies led the way, accounting for 44 percent of the quarterly increase and boosting their commercial mortgage holdings by nearly 3 percent. That increase contrasts with banks, which grew 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.
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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.
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, with 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, reaching 2.9 percent, in their holdings of commercial/multifamily mortgages. Conversely, private pension funds saw their holdings decrease 8.8 percent.
—Posted on January 24, 2025