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CRE Mortgage Delinquencies Rise for Third Consecutive Quarter
Commercial mortgage delinquencies increased again in the third quarter of 2023, according to the Mortgage Bankers Association’s (MBA) latest Commercial Delinquency Report. Q3 represented the third consecutive quarter of delinquency increases.
“Every major capital source saw delinquency rates rise, driven by higher interest rates, changes in some property market fundamentals and uncertainty about property values,” said Jamie Woodwell, MBA’s head of commercial real estate research. “CRE market activity remains muted, further complicating the situation.”
He added, “CRE markets are large and heterogeneous. Data from MBA’s own survey released earlier in the quarter show wide differences in mortgage performance by property type. Deal vintage, term, market and a host of other factors also play into which loans are facing pressure. These differences are likely to remain important in the year ahead.”
Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of Q3 were as follows:
- Banks and thrifts (90 or more days delinquent or in non-accrual): 0.85%, an increase of 0.18 percentage points from Q2;
- Life company portfolios (60 or more days delinquent): 0.32%, an increase of 0.18 percentage points;
- Fannie Mae (60 or more days delinquent): 0.54%, an increase of 0.17 percentage points;
- Freddie Mac (60 or more days delinquent): 0.24%, an increase of 0.03 percentage points; and
- CMBS (30 or more days delinquent or in REO): 4.26%, an increase of 0.44 percentage points.
- ◦Financing
