U.S commercial, multifamily mortgage debt rises to $3.82tn

U.S commercial, multifamily mortgage debt rises to $3.82tn

U.S commercial and multifamily mortgage debt outstanding rose by $57.0 billion (1.5 percent), rose to $3.82 trillion in total, in the third quarter of 2020, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report.

Multifamily mortgage debt alone increased $31.0 billion (1.9 percent) to $1.6 trillion from the second quarter of 2020.  

“The amount of mortgage debt backed by commercial and multifamily properties increased for the 33rd straight quarter,” said Jamie Woodwell, MBA’s Vice President for Commercial Real Estate Research. “Despite a significant fall-off in acquisition financing in in the last two quarters, loan refinancings, particularly for FHA, Fannie Mae, Freddie Mac and bank balance sheets, helped lift total mortgage balances. Continued uncertainty about the pandemic’s long-term impacts is likely to weigh on new financing in the coming quarters. However, positive news about vaccines reflects a light at the end of tunnel regarding the pandemic.”  

The four largest investor groups and shares are:

-Banks and thrifts – 39% – $1.5 trillion;

-Federal agency and government sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) – 21% – $798 billion;

-Life insurance companies – 15% – $577 billion;

-Commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset backed securities (ABS) issues – 14% – $529 billion;


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Looking solely at multifamily mortgages in the third quarter of 2020, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $798 billion (48 percent), followed by banks and thrifts with $478 billion (29 percent), life insurance companies with $168 billion (10 percent), state and local government with $108 billion (7 percent), and CMBS, CDO and other ABS issues holding $52 billion (3 percent). Nonfarm non-corporate businesses hold $20 billion (1 percent).  

In the third quarter, agency and GSE portfolios and MBS saw the largest gains in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $23.2 billion, (3.0 percent). Commercial banks increased their holdings by $12.1 billion (0.8 percent), CMBS, CDO, and other ABS issues increased their holdings by $10.6 billion (2.1 percent), and REITs increased their holdings by $4.9 billion (5.6 percent).  

In percentage terms, REITs saw the largest increase – 5.6 percent – in their holdings of commercial/multifamily mortgages. Conversely, federal government saw their holdings decrease 2.0 percent.

The $31.0 billion increase in multifamily mortgage debt outstanding from the second quarter of 2020 represents a 1.9 percent increase. In dollar terms, agency and GSE portfolios and MBS saw the largest gain – $23.2 billion (3.0 percent) – in their holdings of multifamily mortgage debt. Commercial banks increased their holdings by $4.4 billion (0.9 percent), and state and local government increased by $3.2 billion (3.0 percent). CMBS, CDO, and other ABS issues saw the largest decline in their holdings of multifamily mortgage debt, down $835 million (1.6 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 Wells Fargo Securities.