Financial institutions are showing a continued appetite for multifamily and commercial mortgages. In the second quarter of 2025, lending rose 1% to $47.1 billion. That brought the total volume of outstanding loans in the sector to $4.88 trillion by quarter’s end.
Multifamily mortgage debt alone increased $27.7 billion (1.3 percent) to $2.19 trillion between the first and second quarters of 2025, according to the latest report compiled by the Mortgage Bankers Association (MBA). Commercial mortgages outstanding totaled some $5 trillion at the end of the second quarter.
“Every major capital source added to its holdings, but growth varied, with life insurance companies increasing their holdings by 2.4 percent and banks by 0.9 percent,” commented Reggie Booker, MBA’s associate vice president of commercial research.
The largest share of commercial/multifamily debt was held by commercial banks, which accounted for $1.8 trillion (38%) of such mortgages. An additional $1.08 trillion (22%) was funded by agency and government-sponsored enterprises (GSEs) and mortgage-backed securities (MBS). Life insurance companies held $769 billion (16%). Commercial mortgage-backed securities (CMBS), collateralized securities debt obligations (CDOs) and asset-backed securities (ABS) accounted for $643 billion (13%); they are often held by life insurance companies, banks and GSEs.
Analyzing multifamily loans alone, MBA found that the largest share, $1.08 billion (49%), came in the form of agency and GSE portfolios and MBS. They were followed by banks and thrifts with $645 billion (29%), life insurance companies with $256 billion (12%), state and local governments with $93 billion (4%), while CMBS, CDOs and ABS accounted for $68 billion (3%).
Among all sectors, private pension funds raised their holdings of commercial/multifamily debt the most in percentage terms, boosting their investments by 3%.
Life insurance companies were the sector next most active, adding $17.7 billion (2.4%) to their portfolios. Banks and thrifts upped their stakes by $16.3 billion (0.9%), agency and GSE portfolios and MBS by $8.7 billion (0.8%). REITs raised their investments by $1.9 billion (2.2%). However, state and local government retirement funds pulled back, lowering their holdings by 1.9%.
In terms of multifamily loans alone, life insurers raised their holdings by $14.2 billion (5.8%), the highest share among all groups.
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