They lead $47.7 billion surge in commercial, multifamily mortgage debt in Q3
The amount of commercial and multifamily mortgage debt grew by $47.7 billion, or 1%, in the third quarter of 2024, bringing the total to $4.75 trillion, according to the Mortgage Bankers Association (MBA).
Life insurance companies have driven the growth, significantly expanding their commercial mortgage holdings more than any other investor group last quarter.
”Every major capital source for commercial mortgage debt increased its holdings of mortgages during the third quarter of 2024,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Life insurance companies led the way, accounting for 44% of the quarterly increase and boosting their commercial mortgage holdings by nearly 3%.”
This surge contrasts with banks, which increased their balances of commercial real estate (CRE) mortgages by just 0.3%.
For the ninth consecutive quarter, multifamily properties saw aggregate mortgage balances grow more than other property types, reflecting sustained demand in this sector.
The multifamily mortgage sector saw a $29.8 billion increase in outstanding debt, a 1.4% rise from the previous quarter, bringing the total to $2.12 trillion. Agencies and GSEs continued to dominate the sector, holding $1.03 trillion, or 49%, of the total debt. Banks and thrifts followed with $630 billion, while life insurance companies accounted for $244 billion, with a robust 4.3% quarterly increase.
The report also showed that multifamily debt growth among agency and GSE portfolios and MBS issuers amounted to $12.3 billion, or a 1.2% rise. Meanwhile, bank and thrift holdings increased by $4.7 billion, or 0.8%.
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Commercial banks remained the largest holders of commercial and multifamily mortgages, with $1.8 trillion, representing 38% of the market. Agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) hold $1.03 trillion (22%), followed by life insurance companies with $757 billion (16%) and CMBS, CDO, and other asset-backed securities (ABS) issues at $619 billion (13%).
Life insurance companies not only recorded the largest dollar increase, adding $21.2 billion to their holdings in the quarter, but also the largest percentage increase at 2.9%. Meanwhile, private pension funds saw an 8.8% decline in their holdings of commercial and multifamily mortgage debt.
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