WASHINGTON, DC (June 18, 2024) — Commercial and multifamily mortgage debt outstanding increased by $40.1 billion, or 0.9%, in the first quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest quarterly commercial and multifamily mortgage debt outstanding report.
As of the end of the first quarter, total commercial/multifamily mortgage debt outstanding increased to $4.70 trillion. Multifamily mortgage debt alone increased $23.7 billion, or 1.1%, from the fourth quarter of 2023 to $2.10 trillion.
“Despite weak mortgage issuance activity, commercial mortgage outstandings increased in the first quarter of 2024,” said Jamie Woodwell, head of commercial real estate research at MBA. “All major capital sources increased their commercial mortgage holdings as lower-than-normal paydowns from property sales and refinancings occurred.”
The four largest investor groups are banks and thrifts, federal government agencies and government-sponsored enterprises (GSEs) portfolios and issues of mortgage-backed securities (MBS), life insurance companies, commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs), and other asset-backed securities (ABS).
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 (22%) totaling $1.01 trillion. Life insurance companies hold $720 billion (15%) and CMBS, CDOs and other ABS issuances totaling $604 billion (13%). Many life insurance companies, banks and agency-backed companies purchase and hold CMBS, CDOs and other ABS issuances. These loans appear in the “CMBS, CDOs and Other ABS” category of the report.
The MBA analysis summarizes 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 under Life Insurers) and CMBS, CDOs, and other ABS where the receivables are held by issuers and trustees (shown here under CMBS, CDOs, and other ABS issuance).
Outstanding multifamily mortgage debt
Looking just at multifamily mortgages in 1Q24, agency and GSE portfolios and MBS accounted for the largest portion of total multifamily debt outstanding at $1.01 billion (48%), followed by banks and thrifts at $620 billion (30%), life insurance companies at $230 billion (11%), state and local governments at $117 billion (6%), and CMBS, CDOs and other ABS issuances at $67 billion (3%).
Changes in commercial/multifamily mortgage debt balance
Banks and thrifts had the largest dollar increase in commercial/multifamily mortgage debt in the first quarter, increasing by $12.8 billion, or 0.7%, while CMBS, CDOs and other ABS issuance increased by $11.0 billion, or 1.9%, agency and GSE portfolios and MBS increased by $10.2 billion, or 1.0%, and life insurance companies increased by $7.0 billion, or 1.0%.
Percentage-wise, holdings of commercial/multifamily mortgages issued by CMBS, CDOs, and other ABS increased the most, at 1.9%, while state and local government retirement fund holdings decreased by 8.3%.
Trends in outstanding mortgage debt for multifamily homes
Outstanding multifamily mortgage debt increased by $23.7 billion from the fourth quarter of 2023, a 1.1% quarterly increase. In dollar terms, agency and GSE portfolios and MBS-issued multifamily mortgage debt holdings had the largest increase ($10.2 billion, or 1.0%). Banks and thrifts increased their holdings by $9.1 billion, or 1.5%, and life insurance companies increased by $3.8 billion, or 1.7%.
Non-financial corporates saw the largest increase in multifamily mortgage debt holdings, increasing by 3.2%, while REITs saw the largest decrease in multifamily mortgage debt holdings, decreasing by 9.7%.
The MBA analysis is based on data from the Federal Reserve Board's U.S. financial statements, the Federal Deposit Insurance Corporation's Quarterly Bank Profiles, and Trepp LLC. For more information on this data series, see Appendix A.