Delinquency rates are approaching pre-pandemic levels, according to MBA's latest report
Commercial and multifamily mortgage delinquencies declined in the second quarter of 2022, according to a new report from the Mortgage Bankers Association (MBA).
“Delinquency rates for commercial and multifamily mortgages fell again during the second quarter of 2022,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “Many capital sources are seeing delinquency rates at or approaching pre-pandemic levels, which were some of the lowest delinquency rates on record. MBA survey data has shown significant differences by property type as the COVID-19 pandemic’s effects have morphed. These property-type differences, particularly across changing economic conditions, will continue to be a key factor in commercial and multifamily loan performance.”
MBA releases its commercial/multifamily delinquency report every quarter, providing data on delinquency rates for five of the largest investor-groups in the country, namely commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, and Fannie Mae and Freddie Mac. Together, these groups hold more than 80% of commercial/multifamily mortgage debt outstanding altogether.
According to MBA’s latest report, Q2 delinquency rates declined across all five investor groups as follows:
- Banks and thrifts (90 or more days delinquent or in non-accrual): 0.49%, decreasing 0.07 percentage points from Q1;
- Life company portfolios (60 or more days delinquent): 0.04%, decreasing 0.01 percentage points from Q1;
- Fannie Mae (60 or more days delinquent): 0.34%, decreasing 0.04 percentage points from Q1;
- Freddie Mac (60 or more days delinquent): 0.07%, decreasing 0.01 percentage points from Q1; and
- CMBS (30 or more days delinquent or in REO): 2.95%, decreasing 0.41 percentage points from Q1.
These rates were based on unpaid principal balance (UPB) of loans. With investor groups using individual methods to keep track of loan performance, the MBA report does not compare delinquency rates between different groups.
In addition, the report does not include construction and development loans as they are often backed by single-family residential development projects. It does, however, include loans backed by owner-occupied commercial properties for FDIC delinquency rates for bank and thrift held mortgages.
