Commercial and Multifamily Mortgage Debt Sees Growth in Early 2025

In the first quarter of 2025, commercial and multifamily mortgage debt outstanding rose by $46.8 billion, an increase of 1.0%, reaching a total of $4.81 trillion, according to the Mortgage Bankers Association (MBA). The rise was largely driven by a $19.9 billion increase (0.9%) in multifamily mortgage debt, which grew to $2.16 trillion.

Despite a decrease in origination volumes, MBA’s Associate Vice President of Commercial Real Estate Research, Reggie Booker, noted that the overall increase in debt reflects the ongoing demand for real estate investment and the extended duration of existing loans.

The four major investor groups in commercial and multifamily mortgages are banks and thrifts (38% of total mortgages), federal agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) (22%), life insurance companies (16%), and CMBS, CDO, and other asset-backed securities (ABS) (13%).

Notably, in the first quarter, CMBS, CDO, and ABS holdings saw the largest dollar increase, up by $16.2 billion (2.6%). Banks and thrifts followed with a $13.1 billion (0.7%) increase, while agency and GSE portfolios and MBS rose by $7.5 billion (0.7%). Life insurance companies also grew their holdings by $6.1 billion (0.8%).

For multifamily mortgages, the largest portion (50%) of the debt is held by agency and GSE portfolios and MBS, followed by banks and thrifts with 30%, and life insurance companies holding 11%. In terms of dollar increases, banks and thrifts saw the most growth in multifamily mortgages, adding $10.0 billion (1.6%).

Overall, the multifamily sector continues to see significant interest, with REITs seeing the largest percentage growth in their mortgage holdings, up by 10.9%. However, private pension funds experienced a notable decline in both commercial and multifamily mortgage holdings.

The data for this report is based on information from the Federal Reserve, the FDIC, and Trepp LLC, offering insights into the state of commercial and multifamily mortgage debt as of early 2025. Read the original report here.

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