Outstanding commercial and multifamily mortgage debt rose in the third quarter, figures released Tuesday by the Mortgage Bankers Association (MBA) revealed.
Multifamily and commercial mortgage debt stood at $4.93 trillion at the end of the third quarter, up 1.1% from the second quarter and 4% from a year ago.
Rising 1.8% over the year, outstanding multifamily mortgage debt increased $40.3 billion to $2.24 trillion from the second quarter, outpacing growth in commercial mortgage debt.
Multifamily mortgages — commonly held by government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac and Ginnie Mae, or private entities like banks, life insurance companies and equity funds — back housing projects like apartment complexes, majority residential mixed-use buildings and senior or student housing.
“While economic and market uncertainty persists, agency and GSE portfolios once again led the market, with banks and life insurance companies also posting solid gains,” said Reggie Booker, associate vice president of commercial research at the MBA, in commentary accompanying Tuesday’s release.
Booker noted that multifamily debt was up nearly 6% from the third quarter of 2024, which means it now accounts for 22.5% of total outstanding commercial debt.
According to the MBA, agency and GSE portfolios and mortgage-backed securities (MBS) held the largest share of multifamily debt at $1.11 trillion (50%) in the third quarter, followed by banks and thrifts with about 29% market share ($651 billion) and life insurers (12% or $263 billion).
State and local governments held about $93 billion in multifamily debt, or around 4% market share, while other issuers of commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDO) and asset-backed securities (ABS) had $70 billion in holdings, or 3% market share.
Agency and GSE portfolios and MBS also observed the largest quarterly gain by dollar amount, adding $27.8 billion (2.6%) to their multifamily mortgage holdings. Life insurers increased their holdings by $6.4 billion, or 2.5%, and banks and thrifts by $6.4 billion (1%).
Across the entire market for commercial mortgage debt, commercial banks continue to manage the largest market share at 37%, which translate to $1.8 trillion in holdings, followed by agency and GSE portfolios and securities at $1.11 trillion, or 23%.
Life insurers had $783 billion in commercial mortgage holdings at the end of the third quarter, which translates to 16% market share, while other CMBS, CDO and ABS issuers held $642 billion, or 13% market share.
The MBA noted that “many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issuance,” and those loans appear in the report under the “CMBS, CDO and other ABS category.”
