Outstanding commercial and multifamily mortgage debt at the end of 2022 was $324 billion higher than it was at the end of the prior year, the Mortgage Bankers Association (MBA) reported.
Combined commercial and multifamily debt totaled $4.5 trillion at the close of fourth-quarter 2022, according to the MBA’s newest report on outstanding commercial debt. That’s an increase of 7.7% year over year. On a quarterly basis, combined commercial and multifamily debt rose by $77.9 billion in the fourth quarter, a gain of 1.7%.
Multifamily debt alone at the end of 2022 was at $1.96 trillion, up by $148.2 billion (8.2%) annually and up by $35.6 billion (1.8%) quarter over quarter.
“Commercial and multifamily mortgage debt outstanding grew at another strong clip in 2022,” said Jamie Woodwell, MBA’s head of commercial real estate research. “The rate of growth was the second largest since 2007 – just below 2021’s pace. Among capital sources, depositories led the growth, increasing their holdings of commercial and multifamily mortgages by 12%. Additionally, growth in multifamily mortgage balances accounted for almost half of the annual increase.”
Commercial banks remained the largest holders of commercial and multifamily mortgages, with 39% (about $1.7 trillion) of the total market share. Agency and government-sponsored enterprise portfolios along with mortgage-backed securities held another 21% of outstanding debt ($953 billion), followed by life insurance companies at 15% ($666 billion) and commercial mortgage-backed securities, collateralized debt obligations and other asset-backed securities at 13% ($603 billion).
Real estate investment trusts, which hold 4% of all outstanding commercial and multifamily debt, saw the largest yearly gain in commercial debt market share at 25.8%. No other major investor group saw posted annual growth of more than 12%.
The MBA’s analysis is based on data from the Federal Reserve Board, the Federal Deposit Insurance Corp., Trepp LLC and Wells Fargo Securities.