According to a new report from the Mortgage Bankers Association (MBA), commercial and multifamily mortgage delinquency rates increased in the fourth quarter.
MBA’s quarterly analysis examines commercial delinquency rates for five of the largest investor groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, and government-sponsored enterprises Fannie Mae and Freddie Mac. These groups hold over 80% of outstanding commercial mortgage debt.
“Commercial mortgage delinquency rates rose again during the fourth quarter of 2023,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Every major capital source has seen an increase over the last six months, as higher interest rates, uncertainty about property values, and challenges in some property fundamentals work their way through the markets.”
According to the MBA, each investor group tracks delinquencies in its own way so they are not comparable from one group to another. At the end of the quarter, based on the unpaid principal balance of loans, delinquency rates were:
- Commercial banks and thrifts (90 or more days delinquent or in non-accrual), 0.94%, a 0.09-percentage point increase from the third quarter;
- Life company portfolios (60 or more days delinquent), 0.36%, a 0.04-percentage point increase from the third quarter;
- Fannie Mae (60 or more days delinquent), 0.46%, a 0.08-percentage point decrease from the third quarter;
- Freddie Mac (60 or more days delinquent), 0.28%, a 0.04-percentage point increase from the third quarter; and
- CMBS (30 or more days delinquent or in REO), 4.3%, a 0.04-percentage point increase from the third quarter.
