The level of commercial and multifamily mortgage debt outstanding increased by $47.1 billion, or 1%, in the second quarter, according to the Mortgage Bankers Association (MBA). In its latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report, it found total debt outstanding rose to $4.88 trillion at the end of the second quarter.
The multifamily mortgage debt outstanding increased $27.7 billion, or 1.3%, from the first quarter to $2.19 trillion.
“Commercial and multifamily mortgage debt outstanding increased modestly in this year’s second quarter,” said Reggie Booker, associate vice president of commercial research. “Every major capital source added to its holdings, but growth varied, with life insurance companies increasing their holdings by 2.4% and banks by 0.9%.”
Commercial banks continue to hold the largest share, 38%, of commercial and multifamily mortgages at $1.8 trillion, followed by agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS), 22%, at $1.08 trillion. Life insurance companies hold $769 billion, or 16% of the share.
For multifamily mortgages in the second quarter, agency and GSE portfolios and MBS had almost half the share, 49%, of debt outstanding at $1.08 trillion, followed by banks and thrifts with 29% of the share at $645 billion and life insurance companies with 12% of the share at $256 billion.
According to the MBA, in the second quarter, in dollar terms, life insurance companies saw the largest gains in their holdings of commercial and multifamily mortgage debt—increasing $17.7 billion or 2.4%. Banks and thrifts increase their holdings by $16.3 billion, or 0.9%, while GSE portfolios and MBS increased their holdings by $8.7 billion, or 0.8%. In addition, real estate investment trusts increased their holdings by $1.9 billion, or 2.2%.
In percentage terms, private pension funds saw the largest bump, 3%, in their holdings of commercial and multifamily mortgage debt. On the other end, state and local government retirement funds saw holdings decline 1.9%.
For multifamily mortgage debt outstanding, in dollar terms, life insurance companies experienced the largest gain in their holdings of 5.8% to $14.2 billion. Agency and GSE portfolios and MBS increased their holdings by $8.7 billion, or 0.8%, and banks and thrifts increased by $5.5 billion, or 0.9%.
In percentage terms, life insurance companies also saw the largest increase in holdings of multifamily mortgage debt, up 5.8%. Nonfinancial corporate business experienced the largest decline at 15.5%.