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Commercial Mortgage Delinquencies Decline Slightly in Q2
Delinquencies for commercial mortgages declined slightly in the second quarter of 2024, the Mortgage Bankers Association (MBA) reported. By capital source, CMBS loans posted the highest delinquency rate, although it too declined during Q2.
MBA said 97.0% of outstanding loan balances were current or less than 30 days late at the end of the quarter, up from 96.8% in Q1. 2.5% were 90-plus days delinquent or in REO, unchanged from the previous quarter, while 0.2% were 60-90 days delinquent, down from 0.3% in Q1, and 0.4% were 30-60 days delinquent, unchanged from Q1.
“The delinquency rate for most property types declined last quarter, with the exception of loans backed by office properties, which experienced an increase,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Even so, the pace of increase in the delinquency rate for office property loans appears to have slowed in recent quarters.”
He added, “Commercial properties are working through changes in interest rates, property values, and the fundamentals of some properties. Each property and loan faces a unique mix of conditions depending on that property’s type and subtype, market and submarket, owner, vintage, deal terms and more. As more loans mature throughout the year, more properties will be adjusting to these new conditions.”
