Commercial, Multifamily Mortgage Debt Outstanding Hits $2.83 Trillion in U.S.

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According to the Mortgage Bankers Association, the level of commercial and multifamily mortgage debt outstanding increased to $2.83 trillion in the fourth quarter of 2015, an increase of $59.7 billion, or 2.2 percent, over the third quarter.

On a year-over-year basis, the amount of mortgage debt outstanding at the end of 2015 was $184.5 billion higher than at the end of 2014, an increase of 7.0 percent.  

Multifamily mortgage debt outstanding rose to $1.06 trillion, an increase of $35.4 billion, or 3.4 percent, from the third quarter and $99.8 billion, or 10.4 percent, from the fourth quarter of 2014.

"During 2015, commercial and multifamily mortgage debt grew by the largest amount since the series began in 2007; multifamily mortgage debt grew at the fastest pace since that series began in 1993; and the amount of commercial and multifamily mortgage debt held in agency and GSE portfolios and MBS, and on bank balance sheets, grew more than in any previous year on record," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "At the same time, the amount of mortgage debt held in commercial mortgage backed securities (CMBS) continued to decline.  While 2015 marked many new records, recent market and regulatory changes have the potential to impact the availability of commercial and multifamily mortgage debt during 2016."

The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, with $1.08 trillion, or 38 percent of the total.

CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $515 billion, or 18 percent of the total.  Agency and GSE portfolios and MBS hold $461 billion, or 16 percent of the total, and life insurance companies hold $386 billion, or 14 percent of the total.  Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues.   These loans appear in the CMBS, CDO and other ABS categories.

MULTIFAMILY MORTGAGE DEBT OUTSTANDING

Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $461 billion, or 43 percent of the total multifamily debt outstanding.  They are followed by banks and thrifts with $344 billion, or 32 percent of the total.  State and local governments hold $91 billion, or 9 percent of the total; CMBS, CDO and other ABS issues hold $65 billion, or 6 percent of the total; life insurance companies hold $60 billion, or 6 percent of the total; and the non-farm non-corporate business holds $13 billion, or one percent of the total.

CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING

In the fourth quarter of 2015, bank and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $40.1 billion, or 4 percent.  Agency and GSE portfolios and MBS increased their holdings of commercial/multifamily mortgages by $17.8 billion, or 4 percent.  CMBS, CDO and other ABS issues saw the largest decrease of $5.8 billion or one percent.  

In percentage terms, other insurance companies recorded the largest increase in holdings of commercial/multifamily mortgages, at 4 percent.  Finance companies saw the biggest decrease, at 15 percent.

CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING

The $35.4 billion increase in multifamily mortgage debt outstanding between the third quarter and fourth quarter of 2015 represents a 3.4 percent increase.  In dollar terms, agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt, an increase of $17.8 billion, or 4 percent.  Bank and thrifts increased their holdings of multifamily mortgage debt by $15.0 billion, or 5 percent.  State and local government increased by $2.0 billion, or 2 percent.  CMBS, CDO and other ABS issues saw the biggest decrease in their holdings of multifamily mortgage debt, by $1.3 billion, or 2 percent.

In percentage terms, REITs recorded the largest increase in holdings of multifamily mortgages, at 16 percent.  State and local government retirement funds saw the biggest decrease, at 5 percent.

CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING DURING 2015

Between December 2014 and December 2015, commercial banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $110 billion, or 11 percent.  CMBS, CDO and other ABS issues decreased their holdings of commercial/multifamily mortgages by $18.9 billion, or 4 percent.

In percentage terms, REITs saw the largest increase in their holdings of commercial/multifamily mortgages, an increase of 40 percent.  Finance companies saw the largest decrease, at 32 percent.

CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING DURING 2015

The $99.8 billion increase in multifamily mortgage debt outstanding during 2015 represents a 10 percent increase.  In dollar terms, Agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt - an increase of $48.3 billion, or 12 percent.  CMBS, CDO and other ABS issues saw a decrease of $6.9 billion in their holdings, or 10 percent.

In percentage terms, REITs recorded the largest increase in their holdings of multifamily mortgages, 31 percent, while finance companies saw the largest decrease, 39 percent.