WASHINGTON, D.C. – RealEstateRama – The level of commercial and multifamily mortgage debt outstanding at the end of 2024 was $172 billion (3.7 percent) higher than at the end of 2023, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report.
MBA’s report found that total mortgage debt outstanding – on a quarterly basis – rose by 1.1 percent ($50.7 billion) to $4.79 trillion in fourth-quarter 2024. Multifamily mortgage debt grew by $38.9 billion (1.8 percent) to $2.16 trillion during the fourth quarter, and by $111.0 billion (5.4 percent) for the entire year.
“Commercial and multifamily mortgage debt outstanding increased to almost $4.8 trillion in the fourth quarter of 2024, up 3.7 percent compared to last year. Multifamily debt now totals almost $2.2 trillion, up 5.4 percent compared to the last year,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Life insurance companies had the fastest growth in commercial debt outstanding over the past year, accounting for almost 39 percent of the annual increase. By contrast, bank holdings increased by just 1 percent over the year, with this growth accounting for 10.5 percent of the total increase.”
Added Fratantoni, “For the tenth consecutive quarter, multifamily debt outstanding increased at a faster rate than the overall CRE market. Almost 56 percent of the growth in multifamily MDO reflected growth in Agency and GSE portfolios and mortgage-backed securities (MBS).”
The four major investor groups are: banks and thrifts; commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset backed securities (ABS) issues; federal agency and government sponsored enterprise (GSE) portfolios and MBS; and life insurance companies.
MBA’s analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest in whole loans for which they hold the mortgage note (and which appear in this data under “Life Insurance Companies”), and in CMBS, CDOs and other ABS for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).
Commercial banks and thrifts continue to hold the largest share (38 percent) of commercial/multifamily mortgages at $1.8 trillion. Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages, at $1.1 trillion (22 percent of the total). Life insurance companies hold $779 billion (16 percent), and CMBS, CDO and other ABS issues hold $626 billion (13 percent).
MULTIFAMILY MORTGAGE DEBT OUTSTANDING
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share of total debt outstanding at $1.1 trillion (49 percent of the total), followed by commercial banks with $629 billion (29 percent), life insurance companies with $255 billion (12 percent), state and local governments with $92 billion (4 percent), and CMBS, CDO and other ABS issues with $68 billion (3 percent).
CHANGES IN COMMERCIAL & MULTIFAMILY MORTGAGE DEBT OUTSTANDING
In the fourth quarter of 2024, Agency and GSE portfolios and MBS saw the largest rise in dollar terms in their holdings of commercial/multifamily mortgage debt, with an increase of $31.2 billion (3.0 percent). Life insurance companies increased their holdings by $22.7 billion (3.0 percent), CMBS, CDO and other ABS issues increased their holdings by $6.4 billion (1.0 percent), and federal government increased their holdings by $1.2 billion (1.2 percent). Commercial banks saw a modest decline (0.2 percent) in their holdings, by $4.5 billion.
In percentage terms, agency and GSE portfolios and MBS saw the largest increase – 3.0 percent – in their holdings of commercial/multifamily mortgages.
CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING
The $38.9 billion rise in multifamily mortgage debt outstanding between the third and fourth quarters of 2024 represented a 1.8 percent increase. In dollar terms, agency and GSE portfolios and MBS saw the largest increase, at $31.2 billion (3.0 percent), in their holdings of multifamily mortgage debt. Life insurance companies increased their holdings of multifamily mortgage debt by $10.2 billion (4.2 percent), and CMBS, CDO and other ABS issues increased holdings by $282 million (0.4 percent). State and local government saw a decline (1.7 percent) in their holdings, by $1.6 billion.
In percentage terms, life insurance companies recorded the largest increase in holdings of multifamily mortgages (4.2 percent), and private pension funds saw the biggest decrease (10.9 percent).
CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING DURING 2024
Between December 2023 and December 2024, life insurance companies saw the largest gain in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $67 billion (9.3 percent). Agency and GSE portfolios and MBS increased their holdings of commercial/multifamily mortgages by $61.8 billion (6.2 percent).
In percentage terms, life insurance companies saw the largest increase (9.3 percent) in their holdings of commercial/multifamily mortgages.
CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING DURING 2024
The $111.0 billion rise in multifamily mortgage debt outstanding during 2024 represents a 5.4 percent increase. In dollar terms, agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt at 6.2 percent ($61.8 billion). Private pension funds saw the largest decrease in their holdings, down $419 million (26.4 percent).
The report’s analysis is based on data from the Federal Reserve Board’s Financial Accounts of the United States, the Federal Deposit Insurance Corporation’s Quarterly Banking Profile, and Trepp LLC. More information on this data series is contained in Appendix A. MBA’s analysis is based on data from the Federal Reserve Board’s Financial Accounts of the United States, the Federal Deposit Insurance Corporation’s Quarterly Banking Profile, and data from Trepp LLC. More information on this data series is contained in Appendix A.
More information on this data series is contained in Appendix A – click here: https://www.mba.org/news-and-research/research-and-economics/commercial-multifamily-research/commercial-multifamily-mortgage-debt-outstanding-x44535.
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