Delinquency rates for commercial property mortgages improved during the third quarter of 2025, suggesting a possible short-term stabilization in the commercial real estate market, according to the Mortgage Bankers Association’s latest CRE Loan Performance Survey. The decrease follows a significant uptick in delinquencies during the second quarter.
“Compared to the first quarter, third-quarter delinquency rates were up, driven by increases in later-stage delinquencies and Foreclosure/REO properties,” said Judie Ricks, MBA’s associate vice president of CRE research. “It is worth watching this portion of the market the rest of the year amidst broader economic uncertainty.”
While the overall balance of non-current commercial mortgages declined in Q3, delinquency trends varied by property type. Multifamily and health care loans saw increases in delinquency, whereas office, retail, industrial, and lodging properties experienced declines.
By capital source, CMBS loans continued to show the highest stress, with 5.66% of balances 30 or more days delinquent, up from 5.14% in Q2. Delinquency rates for other capital sources remained moderate: life company loans fell slightly to 1.45% from 1.40%, GSE loans were essentially unchanged at 0.64%, and FHA multifamily and health care loan delinquencies decreased to 0.79% from 1.04%.
The survey covered a loan portfolio of approximately $2.8 trillion, representing 57% of the total $4.9 trillion in CRE mortgage debt outstanding as of September 30.
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