Multifamily Mortgage Debt Increases

Strong borrower and lender interest will drive this key indicator in 2022, according to MBA’s latest report.

$ in billions

Source: MBA

The late summer months of 2021 were very active for multifamily borrowing and lending.

The level of commercial/multifamily mortgage debt outstanding increased by $64.8 billion (1.6 percent), in the third quarter of 2021, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report. Multifamily mortgage debt alone increased $26.6 billion (1.5 percent), to $1.8 trillion from the second quarter of 2021.

Every major investor group increased their holdings of commercial and multifamily mortgages during the third quarter, as many property types have healed considerably since the shutdowns at the onset of the COVID-19 pandemic in early 2020.

Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $885 billion (50 percent), followed by banks and thrifts with $496 billion (28 percent), life insurance companies with $177 billion (10 percent), state and local government with $106 billion (6 percent), and CMBS, CDO and other ABS issues holding $55 billion (3 percent). Non-farm, non-corporate businesses hold $20 billion (1 percent).

REITs saw the largest percentage increase in their holdings of multifamily mortgage debt, up $649 million (9.5 percent). Private pension funds saw the largest decline in their holdings of multifamily mortgage debt, down $65 million (14.3 percent).

Strong interest from both borrowers and lenders is likely to continue to drive increases in commercial and multifamily mortgage debt in 2022.

Jamie Woodwell is the Mortgage Bankers Association’s vice president of commercial real estate research.

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