The amount of commercial and multifamily mortgage debt outstanding swelled in the third quarter, marking the fourth consecutive quarter of increasing mortgage debt, according to Mortgage Bankers Association analysis of the Federal Reserve Board’s flow of funds.
The mortgage debt outstanding increased by $6.6 billion, or 0.3% in 3Q as a result of three of the four major investor groups increased their holdings.
The $2.38 trillion in outstanding commercial/multifamily mortgage debt was $6.6 billion higher than the second quarter figure. Multifamily mortgage debt outstanding rose $825 billion, an increase of $12.1 billion, or 1.5% from the last quarter.
"The overall amount of commercial and multifamily mortgage debt continues to grow," said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.
He added, "Fannie Mae, Freddie Mac, FHA, life insurance companies and banks are all increasing their holdings and/or guarantees of commercial and multifamily mortgages. And for the fourth quarter in a row, the net increase by these and other investor groups has outpaced a decline in the balance of commercial and multifamily mortgages held in commercial mortgage backed securities."
In regards to multifamily mortgages, agency and government-sponsored enterprise portfolios as well as mortgage-backed securities hold the largest share of debt outstanding, with $369 billion, or 45%.
Banks and thrifts are the second largest share of debt outstanding, with $228 billion, or 28% of the total.
In the third quarter, agency and GSE portfolios, and MBS also posted the largest increase in their holdings of commercial/multifamily mortgage debt, rising $9.4 billion, or 2.6%.
Real-estate investment trusts posted the largest increase in their holdings of commercial/multifamily mortgages, with an increase of 3.5. In comparison, the household sector posted a holdings decrease, with 16.6%.