The Mortgage Bankers Association’s latest Commercial Delinquency Report reveals that commercial mortgage delinquencies in the U.S. increased during the fourth quarter of 2024.
“Delinquency rates for commercial mortgages rose in Q4 2024, with the exception of life company loans, which experienced a slight decline,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Despite challenges such as low occupancy rates, uncertainties surrounding return-to-office mandates in the office sector, and an oversupply of multifamily properties, delinquency rates remain relatively low from a historical standpoint.”
Fratantoni added, “MBA estimates that nearly a trillion dollars in loans will mature in 2025. Given these upcoming maturities, combined with economic headwinds and stable yet elevated interest rates, delinquency rates could rise further if borrowers struggle to refinance their loans.”
The MBA’s quarterly analysis examines commercial delinquency rates across five primary capital sources–commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, and Fannie Mae and Freddie Mac. These entities collectively hold over 80% of outstanding commercial mortgage debt. Since each tracks loan performance differently, their delinquency rates are not directly comparable. For instance, Fannie Mae classifies loans in payment forbearance as delinquent, whereas Freddie Mac excludes them if the borrower adheres to the forbearance agreement.
As of Q4 2024, delinquency rates by unpaid principal balance (UPB) were:
Banks and thrifts (90+ days delinquent or in non-accrual): 1.26% (+0.02 percentage points from Q3 2024)
Life company portfolios (60+ days delinquent): 0.43% (-0.03 percentage points from Q3 2024)
Fannie Mae (60+ days delinquent): 0.57% (+0.01 percentage points from Q3 2024)
Freddie Mac (60+ days delinquent): 0.40% (+0.01 percentage points from Q3 2024)
CMBS (30+ days delinquent or in REO): 5.78% (+0.63 percentage points from Q3 2024)
English