Commercial Mortgage Debt Rises as Originations Fall

Commercial and multifamily mortgage outstanding debt increased in the second quarter. Data from the Mortgage Banker’s Association reveals that the level of commercial debt increased to $3.76 trillion at the end of the second quarter, and multifamily mortgage debt grew to $1.6 trillion—a 2% or $32.2 billion increase from the first quarter. While the level of mortgage debt continued to rise, new originations declined during the quarter.

Different branches of the market have experienced divergent trends in mortgage debt growth through the pandemic. Multifamily assets have accounted for 75% of activity at Fannie Mae and Freddie Mac in the last 6 months. The agencies and MBS have the largest total share of multifamily debt at $775 billion or 48% of the market. Banks and thrifts have another 30% or $474 billion of the market and life insurance companies have $167 billion or 10% of the market. CMBS, state and local governments, ABS issues and non-farm corporate businesses account for the remainder of the market.