The 30-plus day delinquency rate for construction loans ended the first quarter at nearly 7.2%, up 6 percentage points from a year earlier. By blending the two, the Federal Reserve reported a combined delinquency rate of more than 3.7%, up 1.2 percentage points from a year earlier.

MBA points out that without the inclusion of construction loans, including those for single-family and other development projects, the delinquency rate for commercial and multifamily real estate would be much lower. If these loans are excluded, MBA said commercial and multifamily mortgages have delinquency levels that are close to historic lows.

There is some logic in excluding such loans, it added. Most real estate practitioners define commercial real estate loans as income producing. Grouping loans for land, development and construction does not meet that industry definition, it said. "This broadening of the definition has had a profound effect on the numbers, and particularly in the current environment, has led to many misimpressions about how banks' commercial / multifamily mortgages are performing."