Multifamily distress has jumped 100 basis points between June and July, which CRED iQ called a "staggering" growth rate. At the end of the previous month, it sat at 8.4%, the fifth consecutive record high and up from 2.6% in January.

That's the third highest stress level among property types, according to CRED iQ, and includes all multifamily-securitized CMBS financing. Office and retail were in worse shape, but there is something scary when deep problems appear in an asset class with natural ongoing demand and little to no room for tenants to walk away. It's not as though there is a home-from-work option. The impending danger in multifamily raises questions about what would happen in a large downturn. Could lenders find buyers fast enough? Operate the properties while waiting? What would the potential impact on society and the economy be?

Concerns about multifamily didn't just start. The minutes from the January Federal Reserve's Federal Open Market Committee indicated that the central bank called out multifamily and office as problematic. In May, the National Association of Home Builders saw declining confidence in the market. Skyrocketing operational expenses have put downward pressure on net operating income.