WASHINGTON, DC (March 14, 2024) – Commercial and multifamily mortgage debt outstanding at the end of 2023 increased by $130 billion, or 2.8%, from the end of 2022, according to the Mortgage Bankers Association’s (MBA) latest Commercial and Multifamily Mortgage Debt Outstanding Quarterly Report.
According to the MBA report, total mortgage debt increased 0.9%, or $41.8 billion, to $4.69 trillion in the fourth quarter of 2023. Multifamily mortgage debt increased $25 billion, or 1.2%, to $2.09 trillion in the fourth quarter and was up $88.5 billion, or 4.4%, for the year.
“Commercial mortgage outstandings increased in the fourth quarter and for the full year 2023,” said Jamie Woodwell, MBA's head of commercial real estate research. “However, the rate of increase was the most moderate since the mid-2010s. All major capital sources increased their mortgage holdings throughout the year. Mortgage issuance was down about 50% in 2023 compared to 2022, which meant fewer loans were being paid off, helping to maintain portfolio size even as inflows declined.”
The four major investor groups are banks and thrifts, commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs), and other asset-backed securities (ABS) issuances, federal government agencies and government-sponsored enterprises (GSEs) portfolios and mortgage-backed securities (MBS), and life insurance companies.
In the MBA analysis, we summarize the loan holdings, or the form of the security if the loans are securitized. For example, many life insurers invest in both whole loans where they hold mortgage receivables (shown here as “life insurers”) and CMBS, CDOs, and other ABS where the receivables are held by issuers and trustees (shown here as CMBS, CDOs, and other ABS issuances).
Commercial banks hold the largest share of commercial/multifamily mortgages (38%) totaling $1.8 trillion. Government and agency portfolios and MBS are the second largest holders of commercial/multifamily mortgages totaling $1 trillion (21% of the total). Life insurance companies hold $733 billion (16%), and CMBS, CDOs and other ABS issuances hold $593 billion (13%).
Outstanding multifamily mortgage debt
Looking just at multifamily mortgages, government and government-sponsored agency portfolios and MBS accounted for the largest share of total outstanding debt at $1 trillion (48% of the total), followed by commercial banks with $612 billion (29%), life insurance companies with $235 billion (11%), state and local governments with $116 billion (6%), and CMBS, CDOs, and other ABS issuances with $67 billion (3%).
Changes in commercial and multifamily mortgage debt balances
Agency and GSE portfolios and MBS commercial/multifamily mortgage debt holdings saw the largest increases in dollar terms, increasing by $15.5 billion (1.6%) in the fourth quarter of 2023. Commercial banks increased their holdings by $14.8 billion (0.8%), life insurance companies increased their holdings by $9.9 billion (1.4%), and non-financial corporate businesses increased their holdings by $1.3 billion (1.1%). Financial companies saw the largest decrease (5.0%) of $1.9 billion.
In percentage terms, agency and GSE portfolios and MBS commercial/multifamily mortgage holdings saw the largest increases at 1.6%.
Trends in outstanding mortgage debt for multifamily homes
From the third quarter of 2023 to the fourth quarter of 2023, multifamily mortgage debt balances increased by $25 billion, an increase of 1.2%. In dollar terms, agency and GSE portfolios and MBS holdings of multifamily mortgage debt had the largest increase of $15.5 billion, or 1.6%. Commercial banks increased their holdings of multifamily mortgage debt by $5.3 billion, or 0.9%, while life insurance companies increased their holdings by $5.2 billion, or 2.2%. Finance companies saw the largest decrease (8.9%), with holdings decreasing by $1.2 billion.
Percentage-wise, life insurance companies saw the largest increase in their multifamily mortgage holdings (2.2%), while finance companies saw the largest decrease (8.9%).
Changes in Commercial/Multifamily Mortgage Outstanding Debt in 2023
Between December 2022 and December 2023, agency and GSE portfolios and MBS saw the largest dollar increase in their holdings of commercial/multifamily mortgage debt, increasing by $49 billion, or 5.1%. Life insurers increased their holdings of commercial/multifamily mortgage debt by $43.5 billion, or 6.3%.
In percentage terms, non-financial corporate businesses saw the largest increase (12.7%) in commercial mortgage/multifamily mortgage holdings.
Changes in outstanding multifamily mortgage debt in 2023
Multifamily mortgage debt outstanding for 2023 increased by $88.5 billion, an increase of 4.4%. In dollar terms, agency and agency portfolio and MBS holdings of multifamily mortgage debt increased the most, by 5.1%, or $49.0 billion. Finance company holdings saw the largest decline, decreasing by $2.7 billion, or 17.7%.
The analysis in this report is based on data from the Federal Reserve Board's U.S. Financial Accounts, the Federal Deposit Insurance Corporation's Quarterly Bank Profiles, and Trepp LLC. For more information about this data series, see Appendix A.
To download the report, click here.
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