Timber Market News Commercial Real Estate and Multifamily Mortgage Delinquencies Trend to Increase in End Use in the Third Quarter
Posted: October 23, 2024
On Tuesday, the Mortgage Bankers Association (MBA) reported that delinquency rates for mortgages backed by commercial real estate increased slightly in the third quarter, according to its latest Quarterly Commercial Real Estate Finance (CREF) Loan Performance Survey. .
MBA’s CREF Loan Performance Survey collected information on commercial and multifamily mortgage portfolios as of September 30. This quarter’s results are based on similar surveys conducted since April 2020. Participants reported $2.6 trillion in loan volume in September, representing 56% of the $4.7 trillion in commercial and multifamily mortgage debt outstanding (MDO).
Non-current commercial loan balances increased slightly in the third quarter. Below is a breakdown by loan type and delinquency.
96.8% of loan balances were 30 days or less past due either currently or at the end of the quarter, down from 97.0% in the prior quarter. 2.7% were 90 days or more past due or in REO, up from 2.5% last quarter. Delinquents between 60 and 90 days were 0.3%, up from 0.2% in the previous quarter. Delinquents between 30 and 60 days were 0.3%, down from 0.4% in the previous quarter. The proportion of loans in arrears increased for some property types, particularly offices, but decreased for industrial, lodging, and commercial properties. The percentage of outstanding office real estate loans that are 30 days or more past due was 7.8%, up from 7.1% at the end of the previous quarter. 5.6% of lodging loan balances were delinquent, down from 5.8% in the previous quarter. 3.8% of retail balances were in arrears, down from 4.5%. 1.2% of multifamily household balances were delinquent, up from 1.1%. 0.6% of industrial real estate loan balances are delinquent, down from 0.8%. Among funding sources, CMBS loan delinquency rates were among the highest, but remained flat throughout the quarter. 4.8% of CMBS loans outstanding were 30 days or more past due, unchanged from the previous quarter. Illiquid interest rates on other sources of capital remained more moderate. 0.9% of FHA multifamily and medical loan balances were 30 days or more past due, unchanged during the quarter. The delinquency rate of life insurance companies’ outstanding loans was 0.9%, down from 1.0%. 0.5% of GSE loan balances were delinquent, up from 0.4% in the previous quarter.
Adding context and analysis to the report, Jamie Woodwell, MBA Vice-Chancellor and Head of Commercial Real Estate Research, said:
“Delinquency rates for commercial loans backed by office real estate continued to rise in the third quarter, while delinquency rates for loans backed by lodging, retail, and industrial properties declined.Commercial Mortgage Loans The market is large and diverse, covering a variety of property types, sizes, ages, geographic markets and submarkets, tenant types, vintages, and more, each of which has some positive and some positive effects. It’s impacting loan performance, including negatively.”
FEA compiles timber market news from a variety of third-party sources to provide readers with the latest news impacting the forest products market. The views and opinions expressed in these articles do not necessarily represent the views of FEA.
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