July 30, 2021

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Mortgage News

Commercial mortgage debt outstanding rises in 1Q as pandemic wanes

There was a 1.1% increase in outstanding commercial and multi-family mortgage debt during the first quarter, but the majority came from the housing side of the equation, the Mortgage Bankers Association said.

Total outstanding trade and multi-family debt as of March 31 was $ 3.93 trillion, up $ 44.6 billion from the end of 2020. Multi-family debt closed the first quarter at $ 1.7 trillion which is an increase of $ 28.8 billion, or 1.7%, over the previous three months.

On March 31, 2020, as well as the affected pandemic-related closings Loan performance for leisure and retail properties Initially, it had $ 3.72 trillion in commercial and multi-family debt, with the multi-family segment accounting for $ 1.6 trillion.

“The Growth in the Pandemic Era The level of outstanding commercial and multi-family mortgage debt continued in the first quarter, but growth was not evenly distributed, “said Jamie Woodwell, vice president of commercial real estate research for the MBA, in a press release that sources increased their holdings of commercial and multi-family homes -Mortgages during the quarter, but nearly two-thirds of the total growth came from apartment buildings, with 80% of that multi-family growth coming from government-sponsored agencies and government-sponsored corporate mortgage-backed securities and portfolios. “

At the end of the first quarter, banks had commercial and multi-family mortgages for $ 1.49 trillion, or 38% of the total outstanding. This is a slight increase from $ 1.48 trillion (38%) on December 31, 2020 and $ 1.4 trillion (39%) on March 31, 2020.

But when it comes to just outstanding multi-family debt, the agency / GSE investors have the largest stake, 50% at $ 861 billion. This also makes them the second largest group of investors overall.

In the fourth quarter, the agency / GSE sector held multi-family debt of $ 838 billion, while at the end of the first quarter of 2020 it held $ 752 billion.

But GSE investments in multi-family mortgages could be stifled in the future through regulatory caps Limit the purchases of these loans.

Life insurers held $ 588 billion as of March 31, down from $ 587 billion in the fourth quarter and $ 572 billion in the first quarter of 2020. Securitization companies held $ 540 billion in outstanding debt in the first quarter compared to $ 533 billion. In the fourth quarter and $ 516 billion a year ago.

Despite the quarterly and yearly growth and the continued reopening of the US economy, investors are likely to reassess where new funding is at stake.

“As uncertainty from the COVID-19 pandemic subsides, lenders will have more clarity about the different properties and property types and be in a stronger position to make new loans,” said Woodwell.