MBA reveals what’s behind the growth and what comes next
The commercial/multifamily market saw a $99.5 billion increase in mortgage debt outstanding in the second quarter – the second largest quarterly gain since 2007.
The level of commercial/multifamily mortgage debt outstanding jumped 2.3% to $4.38 trillion at the end of Q2, according to the Mortgage Bankers Association’s latest report. Multifamily mortgage debt alone increased by $35.7 billion (1.9%) to $1.9 trillion.
In terms of holdings, commercial banks continue to hold the biggest share (38%) of commercial/multifamily mortgages at $1.7 trillion. Federal agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) hold $919 billion – the second-largest share (21%). Life insurance companies followed with $648 billion (15%), and CMBS, CDO and other ABS issues with $613 billion (14%).
“The increase in holdings by depositories was the largest on record,” said Jamie Woodwell, VP of commercial real estate research at MBA. “The data match the fact that the first half of 2022 saw more commercial and multifamily borrowing and lending than any previous January through June period.”
The report also showed changes in dollar terms from the first quarter. Commercial banks gained $51.9 billion (3.2%) in their commercial/multifamily mortgage debt holdings. REITs grew their holdings by $22.3 billion (14.4%), life insurance companies increased their holdings by $13.1 billion (2.1%), and agency and GSE portfolios and MBS increased their holdings by $8 billion (0.9%).
“Given a variety of changes in space, equity, and debt markets since the start of the year, we expect the pace to slow considerably in coming quarters,” Woodwell said.