WASHINGTON, DC—Commercial and multifamily mortgage debt outstanding ticked upward by 1.6% in the second quarter, the Mortgage Bankers Association said Wednesday. Among the four major lending classes, CMBS—a tally also including CDOs and other ABS—was the outlier in experiencing a decline, as it also proved to be in terms of delinquencies during Q2.

For CMBS, the 2.4% quarterly drop represented a continuation of the decline in volume, which stood at $427.5 billion as Q2 ended. MBA cites a greater volume of CMBS loans being paid off or down than were originated.

However, says MBA's Jamie Woodwell, “This may be one of the last quarters of this long-term trend, as the 10-year loans that were made in 2006 and 2007 have now almost all matured, and there are relatively few CMBS maturities during the remainder of 2017 and 2018.” CMBS balances declined by more than $20 billion in Q1 and by $10 billion in the most recent quarter. An even greater decline, percentage-wise, was seen in CMBS' share of multifamily mortgage debt; it declined 5.7% during Q2

Also of note, says Woodwell, MBA's VP of commercial real estate research, “is that for the first time since 2015, the dollar increase in multifamily mortgages was slower than the growth in debt backed by other property types.” Multifamily debt rose by $21.7 billion during Q2, less than 50% of the $48.7-billion overall increase that brought the total up to $3.06 trillion. In the previous quarter, by contrast, it accounted for nearly two-thirds of the $37.6-billion increase in total commercial and multifamily mortgage debt outstanding.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages: $1.2 trillion, or 41% of the total. Banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt, at $24.7 billion, or 2.0%. They also garnered the biggest share of the quarter-over-quarter dollar increase, 50.6%.

Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages, representing $553 billion, or 18% of the total. Among the four major lending groups, this of lenders saw the second largest percentage increase over the prior quarter at 2.5%.

Leading the way for percentage gains among the big four groups were life insurance companies, up 2.9%. Similarly, “other” insurance companies saw the biggest percentage increase of any lender class tracked by MBA, with a 10.4% increase. Life companies hold $448 billion, or 15% of the total.

Earlier this week, MBA reported that Q2 commercial and multifamily mortgage delinquencies were basically flat compared to Q1. “Loans backed by commercial and multifamily properties continue to perform extremely well,” says Woodwell. “For most lender types—including banks, life insurance companies, Fannie Mae and Freddie Mac—delinquency rates are at or near their all-time lows.”

With an uptick of 0.30 percentage points during the Q2, CMBS represents “the one outlier,” Woodwell adds. “The slower decline in the balance of loans that are delinquent than in the total of all loans has pushed the delinquency rate higher. We expect that situation to reverse in coming quarters.”

WASHINGTON, DC—Commercial and multifamily mortgage debt outstanding ticked upward by 1.6% in the second quarter, the Mortgage Bankers Association said Wednesday. Among the four major lending classes, CMBS—a tally also including CDOs and other ABS—was the outlier in experiencing a decline, as it also proved to be in terms of delinquencies during Q2.

For CMBS, the 2.4% quarterly drop represented a continuation of the decline in volume, which stood at $427.5 billion as Q2 ended. MBA cites a greater volume of CMBS loans being paid off or down than were originated.

However, says MBA's Jamie Woodwell, “This may be one of the last quarters of this long-term trend, as the 10-year loans that were made in 2006 and 2007 have now almost all matured, and there are relatively few CMBS maturities during the remainder of 2017 and 2018.” CMBS balances declined by more than $20 billion in Q1 and by $10 billion in the most recent quarter. An even greater decline, percentage-wise, was seen in CMBS' share of multifamily mortgage debt; it declined 5.7% during Q2

Also of note, says Woodwell, MBA's VP of commercial real estate research, “is that for the first time since 2015, the dollar increase in multifamily mortgages was slower than the growth in debt backed by other property types.” Multifamily debt rose by $21.7 billion during Q2, less than 50% of the $48.7-billion overall increase that brought the total up to $3.06 trillion. In the previous quarter, by contrast, it accounted for nearly two-thirds of the $37.6-billion increase in total commercial and multifamily mortgage debt outstanding.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages: $1.2 trillion, or 41% of the total. Banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt, at $24.7 billion, or 2.0%. They also garnered the biggest share of the quarter-over-quarter dollar increase, 50.6%.

Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages, representing $553 billion, or 18% of the total. Among the four major lending groups, this of lenders saw the second largest percentage increase over the prior quarter at 2.5%.

Leading the way for percentage gains among the big four groups were life insurance companies, up 2.9%. Similarly, “other” insurance companies saw the biggest percentage increase of any lender class tracked by MBA, with a 10.4% increase. Life companies hold $448 billion, or 15% of the total.

Earlier this week, MBA reported that Q2 commercial and multifamily mortgage delinquencies were basically flat compared to Q1. “Loans backed by commercial and multifamily properties continue to perform extremely well,” says Woodwell. “For most lender types—including banks, life insurance companies, Fannie Mae and Freddie Mac—delinquency rates are at or near their all-time lows.”

With an uptick of 0.30 percentage points during the Q2, CMBS represents “the one outlier,” Woodwell adds. “The slower decline in the balance of loans that are delinquent than in the total of all loans has pushed the delinquency rate higher. We expect that situation to reverse in coming quarters.”