MBA: CMF Mortgage Debt Outstanding Reaches New High
Commercial/multifamily mortgage debt outstanding at year-end 2021 rose by $287 billion (7.4 percent) from the previous year, the Mortgage Bankers Association reported Wednesday.
The MBA quarterly Commercial/Multifamily Mortgage Debt Outstanding quarterly report said total mortgage debt outstanding rose by 2.9 percent ($116.0 billion) in the fourth quarter. 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.
“Strong borrowing and lending backed by commercial and multifamily properties drove the level of mortgage debt outstanding to a new high at the end of 2021,” said Jamie Woodwell, MBA Vice President of Commercial Real Estate Research. “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.”
Woodwell noted the 7.4 percent annual increase in outstanding debt compares to a 19.5 percent increase in underlying property values.
Commercial banks continue to hold the largest share (38 percent) of commercial/multifamily mortgages at $1.6 trillion. Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages at $901 billion (22 percent of the total). Life insurance companies hold $618 billion (15 percent) and CMBS, CDO, and other ABS issues hold $609 billion (15 percent).
Multifamily Mortgage Debt Outstanding
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).
Changes in Commercial/Multifamily Mortgage Debt Outstanding
In the fourth quarter, CMBS, CDO and other ABS issues saw the largest rise in dollar terms in their holdings of commercial/multifamily mortgage debt, with a $45.1 billion (8.0 percent) increase. Commercial banks increased their holdings by $35.8 billion (2.3 percent), Agency and GSE portfolios and MBS increased their holdings by $16.0 billion (1.8 percent) and life insurance companies increased their holdings by $8.7 billion (1.4 percent).
By percent, CMBS, CDO and other ABS issues saw the largest increase–8.0 percent–in their holdings of commercial/multifamily mortgages.
Changes in Multifamily Mortgage Debt Outstanding
The $42.1 billion rise in multifamily mortgage debt outstanding between the third and fourth quarters represented a 2.4 percent increase. In dollar terms, commercial banks saw the largest increase in their holdings of multifamily mortgage debt at $16.5 billion (3.3 percent). Agency and GSE portfolios and MBS increased their holdings of multifamily mortgage debt by $16.0 billion (1.8 percent). CMBS, CDO and other ABS increased holdings by 12.8 percent to $7.1 billion. Private pension funds saw the largest decline (16.8 percent) in their holdings, by $65 million.
By percent, CMBS, CDO and other ABS recorded the largest increase in holdings of multifamily mortgages (12.8 percent), while private pension funds saw the biggest decrease (16.8 percent).
Changes in 2021 Commercial/Multifamily Mortgage Debt Outstanding
Between December 2020 and December 2021, commercial banks saw the largest gain in dollar terms in their holdings of commercial/multifamily mortgage debt–an increase of $87 billion (5.9 percent). CMBS, CDO and other ABS issues increased their holdings of commercial/multifamily mortgages by $76.0 billion (14.2 percent).
By percent, real estate investment trusts saw the largest increase (23.1 percent) in their holdings of commercial/multifamily mortgages.
Changes in 2021 Multifamily Mortgage Debt Outstanding
The $121.9 billion rise in multifamily mortgage debt outstanding during 2021 represents a 7.2 percent increase. 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). The federal government saw the largest decrease in its holdings, down $260 million (2.3 percent).
By percent, 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 MBA analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under “Life Insurance Companies”), and in CMBS, CDOs and other ABS for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).
The four major investor groups are: bank and thrift; commercial mortgage-backed securities, collateralized debt obligation and other asset-backed securities issues; federal agency and government-sponsored enterprise portfolios and mortgage-backed securities; and life insurance companies.
MBA’s complete Commercial/Multifamily Mortgage Debt Outstanding report can be downloaded here.
The MBA analysis is based on data from the Federal Reserve Board’s Financial Accounts of the United States, the Federal Deposit Insurance Corp.’s Quarterly Banking Profile and data from Wells Fargo Securities. More information on this data series is contained in Appendix A.
