It comes despite the continuous pullback in borrowing
Commercial and multifamily mortgage debt outstanding saw a slight increase in the third quarter of 2023.
In the Mortgage Bankers Association’s (MBA) latest Commercial and Multifamily Mortgage Debt Outstanding quarterly report, the level of commercial and multifamily mortgage debt outstanding increased by 0.8%, amounting to $37.1 billion in Q3 2023.
With the slight increase, total commercial and multifamily mortgage debt outstanding rose to $4.63 trillion by the end of the third quarter.
“The level of commercial mortgage debt outstanding has continued to increase despite a continued pullback in borrowing,” said Jamie Woodwell, MBA’s head of commercial real estate research.
“A decline in sales transaction and refinance volumes has meant less new debt being extended, but it also means that fewer loans are paying off than in many earlier periods. The result is that debt levels continue to rise, but at a pace that is roughly half of what was seen last year,” he added.
According to the report, the four largest investor groups were banks and thrifts, federal agency and government sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS), life insurance companies, and commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset-backed securities (ABS) issues.
Commercial banks still had the largest share of commercial and multifamily mortgages with 38% amounting to $1.8 trillion. Agency and GSE portfolios and MBS followed suit with 21% amounting to $986 billion. Life insurance companies had 15% with $702 billion, while CMBA, CDO and other ABS issues had 13% with $563 billion.
Agency, GSE portfolios and MBS held the largest shares of total multifamily debt outstanding at 48%, amounting to $986 billion. They also saw the largest gains in their holdings of commercial and multifamily mortgage debt with a 1.6% increase, amounting to $15.6 billion.
MBA’s analysis summarized holdings of loans or the form of security if the loans were securitized.
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