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Commercial, Multifamily Debt Grows in Q4

In the fourth quarter of 2012, commercial and multifamily mortgage debt continued to grow, reaching the highest level in four years, according to a ""report"":http://mba.informz.net/MBA/data/images/cmfdebtoutstandingq412.pdf from the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

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Commercial and multifamily mortgage debt was up by $21.8 billion, or 0.9 percent, from the previous quarter and up $29.7 billion, or 1.2 percent, from the fourth quarter of 2011, the MBA reported.

""The appetite among lenders and investors for commercial and multifamily mortgages grew during the fourth quarter,"" said Jamie Woodwell, MBA’s VP of commercial real estate research. ""The fourth quarter saw the largest increase in commercial and multifamily mortgage debt outstanding since 2008.""

""Bank-held commercial mortgages increased by the largest amount since 2008. The balance of loans held in CMBS rose by

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the most since 2007 and the balances of loans held by life companies and held or guaranteed by Fannie Mae, Freddie Mac and FHA continued their multi-year increases,"" he added.

Banks and thrifts held the largest share of commercial/multifamily mortgages at 35 percent, or $836 billion. CMBS, CDO and other ABS issues held the second largest share-23 percent or $561 billion.

Agency and GSE portfolios and MBS held 16 percent, or $376 billion, the third largest share.

Bank and thrifts saw the largest quarterly increase in holdings of commercial/multifamily mortgages after growing by 2.1 percent.

Multifamily mortgage debt outstanding grew to $846 billion in the fourth quarter, a quarterly and yearly increase of 1.4 percent and 4.4 percent, respectively.

Agency and GSE portfolios and MBS held nearly half, or 45 percent, of all multifamily mortgage debt. Their share represents $376 billion. Banks and thrifts followed with a 28 percent share, while CMBS, CDO and other ABS issues held 10 percent of the total.

In dollar terms, agency and GSE portfolios and MBS increased their holdings of multifamily debt by $7.6 billion, the most out of any other sector. Private pension funds grew the most in terms of percentage and rose 11.6 percent.

MBA's analysis is based on data from the Federal Reserve Board's Flow of Funds and the FDIC's Quarterly Banking Profile.

About Author: Esther Cho

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