The total amount of commercial/multifamily mortgage debt outstanding climbed by $40.1 billion (0.9%) in Q1 of 2024, according to the Mortgage Bankers Association‘s (MBA) most recent Commercial/Multifamily Mortgage Debt Outstanding quarterly report.
The total outstanding commercial/multifamily mortgage debt increased to $4.70 trillion at the end of the Q1. Multifamily mortgage debt climbed by $23.7 billion (1.1%) to $2.10 trillion since Q4 of 2023.
“The amount of commercial mortgage debt outstanding increased in the first quarter of 2024, despite slow mortgage originations activity,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “Every major capital source increased its holdings of commercial mortgages, as fewer loans than usual were paid off through property sales or refinancings.”
The four largest investor groups are: banks and thrifts; federal agency and government sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS); life insurance companies; and commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset-backed securities (ABS) issues.
Commercial banks continue to hold the largest percentage (38%) of commercial/multifamily mortgages, totaling $1.8 trillion. Agency and GSE portfolios, including MBS, are the second-largest holders of commercial/multifamily mortgages (22%), totaling $1.01 trillion. Life insurance companies own $720 billion (15%), while CMBS, CDO, and other ABS concerns hold $604 billion (13%). Many life insurance companies, banks, and GSEs purchase and hold CMBS, CDOs, and other ABS securities.
Just looking at multifamily mortgages in Q1 of 2024, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $1.01 billion (48%), followed by banks and thrifts with $620 billion (30%), life insurance companies with $230 billion (11%), state and local governments with $117 billion (6%), and CMBS, CDO, and other ABS issues with $67 billion.
Changes in Commercial/Multifamily Mortgage Debt Outstanding
Banks and thrifts had the highest dollar gains in their holdings of commercial/multifamily mortgage debt in Q1, increasing by $12.8 billion (0.7%). CMBS, CDO, and other ABS issues grew their holdings by $11.0 billion (1.9%); agency and GSE portfolios and MBS raised their holdings by $10.2 billion (1.0%); and life insurance firms expanded their holdings by $7.0 billion (1.0%).
In percentage terms, CMBS, CDO, and other ABS issues had the greatest increase in commercial/multifamily mortgage holdings (1.9%). In contrast, state and local government retirement plans saw their holdings fall 8.3%.
Changes in Multifamily Mortgage Debt Outstanding
Multifamily mortgage debt outstanding increased by $23.7 billion in Q4 of 2023, representing a 1.1% quarterly rise. In terms of dollars, agency and GSE portfolios, as well as MBS issuance, had the greatest increase in their holdings of multifamily mortgage debt, totaling $10.2 billion (1.0%). Banking and thrift institutions grew their holdings by $9.1 billion (1.5%), while life insurance firms gained by $3.8 billion (1.7%).
Non-financial corporate businesses showed the greatest percentage increase in their holdings of multifamily mortgage debt, at 3.2%. REITs’ holdings of multifamily mortgage debt fell the most, by 9.7%.
To read the full report, including more data, charts, and methodology, click here.
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