Multifamily Mortgage Debt Rises By $28B In Q1

Total commercial and multifamily mortgage debt increased by $61 billion to $3.72 trillion in the first quarter of the year, according to a new report released Tuesday by the Mortgage Bankers Association.

The latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report showed that multifamily mortgage debt increased by $28 billion to $1.6 trillion from the fourth quarter of 2019.

“The rise in commercial and multifamily mortgage debt in the first three months of the year carried forward the strong level of activity during 2019. Rising property values, strong incomes and low interest rates supported increased borrowing and lending,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “With the onset of the COVID-19 pandemic, borrowing and lending has slowed, and some of the tailwinds from earlier this year have reversed.”

The MBA report showed that commercial banks continue to hold the largest share (39 percent) of commercial/multifamily mortgages at $1.4 trillion. Agency and GSE portfolios and mortgage-backed securities are the second largest holders of commercial/multifamily mortgages (20 percent) at $752 billion. Life insurance companies hold $572 billion (15 percent), and commercial mortgage-backed securities, collateralized debt obligation and other asset-backed securities issues hold $516 billion (14 percent). 

“The coming months are likely to see greater differentiation in debt levels, both by capital source and property type, as investors and lenders assess market conditions,” Woodwell said.

See the full report here.