MBA releases late commercial, multifamily delinquency rate figures
The slowdown in the commercial real estate sector continued to put pressure on loans backed by commercial and multifamily properties, according to the Mortgage Bankers Association’s latest report.
Commercial and multifamily delinquency rates increased for most capital sources during the second quarter. These groups hold over 80% of commercial and multifamily mortgage debt outstanding. Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group were as follows:
- Banks and thrifts (90 or more days delinquent or in non-accrual) rose to 0.66% in Q2, up 0.09% from Q1.
- Fannie Mae delinquencies (60 or more days delinquent) increased to 0.37%, up 0.02% from the previous quarter, and
- Freddie Mac delinquencies (60 or more days delinquent) climbed to 0.21%, up 0.08% from the first quarter.
- Delinquency rates for CMBS-backed loans (30 or more days delinquent or in REO) jumped 0.82 percentage points to 3.82% in the second quarter.
- Life company portfolios (60 or more days delinquent) were the only outlier, dropping 0.07% quarter over quarter to 0.14%.
“Although the uptick in delinquency rates was expected, they remain at the lower end of historical ranges,” said Jamie Woodwell, head of commercial real estate research at MBA. “Higher and volatile interest rates, uncertainty about property values, and stresses in some property markets have increased pressure on some loans and properties.”
While MBA’s analysis incorporates the measures used by each group to track the performance of their loans, MBA noted that delinquency rates are not comparable from one group to another because they track delinquency rates their own way.
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“Not all commercial mortgage loans are facing the same pressures,” Woodwell added. “Loans backed by properties and property types with stable cash flows are experiencing different prospects than those that may have seen declines in incomes. Additionally, long-term loans are experiencing less of a change in interest rates than those with shorter terms or adjustable rates.”
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