After “significant rises” in the second quarter of 2025, delinquency rates for mortgages backed by commercial properties decreased during the third quarter, according to updated figures from the Mortgage Bankers Association (MBA).
The share of delinquent loans increased for some property types, including multifamily and health, while decreasing for office, retail, industrial and lodging-related properties.
“Compared to the first quarter, third-quarter delinquency rates were up, driven by increases in later stage delinquencies and foreclosure/REO properties,” noted Judie Ricks, associate vice president of commercial real estate research for the MBA, in a press release.
Commercial mortgage-backed securities (CMBS) saw the highest delinquency rates among capital sources tracked by the MBA in its CREF Loan Performance Survey, a monthly collection of commercial loan delinquency statuses across property type and capital source.
In the third quarter, 5.66% of CMBS loan balances were 30 days or more delinquent, up from 5.14% at the end of the second quarter.
The MBA began the quarterly CREF survey in early 2020 to assess the impact of the COVID-19 pandemic on commercial mortgage performance.
Overall, the balance of commercial mortgages that are not current declined from the third quarter to the second quarter. “Non-current rates for other capital sources remained moderate,” the MBA reported.
Specifically, 1.45% of life company loan balances were delinquent, a slight decline from the second quarter’s 1.4%. Government-sponsored enterprise loan balances, which includes commercial mortgages backed by Fannie Mae and Freddie Mac, also saw a marginal dip in commercial delinquency rates from 0.64% to 0.61%.
Delinquency rates on multifamily and health care loans insured by the Federal Housing Administration slid from 1.04% in the second quarter to 0.79% in the third quarter.
