$ in billions
Strong borrowing and lending backed by commercial and multifamily properties drove the level of total mortgage debt outstanding to a new high at the end of 2021.
The last three months of the year marked the largest quarterly increase in mortgage debt outstanding on record, as every major capital source increased their holdings. The 7.4 percent annual increase in outstanding debt compares to a 19.5 percent increase in underlying property values.
During fourth-quarter 2021, mortgage debt outstanding was $287 billion (7.4 percent) higher than at the end of 2020, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report. Total mortgage debt outstanding rose by 2.9 percent ($116.0 billion) in fourth-quarter 2021. Multifamily mortgage debt grew by $42.1 billion (2.4 percent) to $1.81 trillion during the fourth quarter, and by $121.9 billion (7.2 percent) for the entire year.
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share of total debt outstanding at $901 billion (50 percent of the total), followed by commercial banks with $513 billion (28 percent), life insurance companies with $179 billion (10 percent), state and local governments with $106 billion (6 percent), and CMBS, CDO and other ABS issues with $62 billion (3 percent).
In dollar terms, agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt at 7.6 percent ($63.3 billion). Federal government saw the largest decrease in their holdings, down $260 million (2.3 percent).
In percentage terms, REITs recorded the largest increase in their holdings of multifamily mortgages, 53.2 percent, while private pension funds saw the largest decrease, at 44.6 percent.
The early 2022 multifamily lending landscape is looking solid. The final three months of 2021 show evidence of continued strong lending activity this year. Fourth-quarter 2021 originations jumped 57 percent (on an annual basis) for multifamily properties.
Jamie Woodwell is the Mortgage Bankers Association’s vice president of commercial real estate research.