Commercial Real Estate News
U.S. Commercial, Multifamily Mortgage Delinquency Rates Uptick in Q4
According to the Mortgage Bankers Association's latest Commercial Delinquency Report, U.S. commercial mortgage delinquencies increased in the fourth quarter of 2023.
"Commercial mortgage delinquency rates rose again during the fourth quarter of 2023," said Jamie Woodwell, MBA's Head of Commercial Real Estate Research. "Every major capital source has seen an increase over the last six months, as higher interest rates, uncertainty about property values, and challenges in some property fundamentals work their way through the markets."
MBA's quarterly analysis looks at commercial delinquency rates for five of the largest investor-groups: 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 percent of commercial mortgage debt outstanding. MBA's analysis incorporates the measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another. As an example, Fannie Mae reports loans receiving payment forbearance as delinquent, while Freddie Mac excludes those loans if the borrower is in compliance with the forbearance agreement.
Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the fourth quarter of 2023 were as follows:
- Banks and thrifts (90 or more days delinquent or in non-accrual): 0.94 percent, an increase of 0.09 percentage points from the third quarter of 2023;
- Life company portfolios (60 or more days delinquent): 0.36 percent, an increase of 0.04 percentage points from the third quarter of 2023;
- Fannie Mae (60 or more days delinquent): 0.46 percent, a decrease of 0.08 percentage points from the third quarter of 2023;
- Freddie Mac (60 or more days delinquent): 0.28 percent, an increase of 0.04 percentage points from the third quarter of 2023; and
- CMBS (30 or more days delinquent or in REO): 4.30 percent, an increase of 0.04 percentage points from the third quarter of 2023.
