Chart of the Week: Latest Delinquency Rates and Range Since 1996

Commercial mortgage delinquencies increased across all major capital sources in the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) latest Commercial Delinquency Report. While overall delinquency rates remain relatively low by historical standards, the increases highlight growing stress in parts of the market, particularly in sectors facing refinancing challenges or weakened fundamentals.

The highest delinquency rate was among commercial mortgage-backed securities (CMBS), which rose to 6.42%, although this was still well below the peak CMBS delinquency rate of over 10% seen during the COVID-19 pandemic in mid-2020. Bank and thrift-held mortgages saw delinquencies rise to 1.28%, compared to their high of 4.4% during the Great Financial Crisis. Life insurance companies posted a delinquency rate of 0.47%, far below their recession-era peak of around 0.3% in 2010, although up slightly from recent lows.

Fannie Mae and Freddie Mac reported delinquency rates of 0.63% and 0.46%, respectively. Both remain significantly below their pandemic-era highs, Fannie Mae peaked at over 1% in 2021, while Freddie Mac surpassed 0.8% during the same period. Although the current levels of delinquencies remain manageable, the consistent upward movement across all capital sources signals a potential turning point in credit performance as the commercial real estate market adjusts to tighter financial conditions and shifting demand across property types.

–Reggie Booker (rbooker@mba.org)