The level of commercial/multifamily mortgage debt outstanding increased by $41.2 billion, or 1.7 percent, in the fourth quarter of 2013, as all four major investor groups increased their holdings, according to the Mortgage Bankers Association (MBA). On a year-over-year basis, the amount of mortgage debt outstanding at the end of 2013 was $90.5 billion higher than at the end of 2012, an increase of 3.7 percent.
Multifamily mortgage debt outstanding rose to $895 billion, an increase of $11.5 billion, or 1.3 percent, from the third quarter and $36.6 billion, or 4.3 percent, from the fourth quarter of 2012.
“During the fourth quarter, commercial and multifamily mortgage debt outstanding reached a new high, erasing the declines caused by the recession,” said Jamie Woodwell, MBA’s VP of Commercial Real Estate Research. “Over the course of 2013, banks increased their holdings of commercial and multifamily mortgages by seven percent, and their balance of just multifamily mortgages by more than 12 percent. Commercial mortgage-backed securities’ holdings increased for the first time since 2007, and life insurance companies, the GSEs and FHA each increased their holdings (or guarantees) by more than three percent. Simply put, it was a strong year.”
The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).
Commercial banks continue to hold the largest share of commercial/multifamily mortgages, with $897 billion, or 36 percent of the total.
CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $567 billion, or 22 percent of the total. Agency and GSE portfolios and MBS hold $391 billion, or 15 percent of the total, and life insurance companies hold $336 billion, or 13 percent of the total. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the CMBS, CDO and other ABS categories.
Multifamily Mortgage Debt Outstanding
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $391 billion, or 44 percent of the total multifamily debt outstanding. They are followed by banks and thrifts with $263 billion, or 29 percent of the total. CMBS, CDO and other ABS issues hold $75 billion, or eight percent of the total; state and local governments hold $75 billion, or eight percent of the total; life insurance companies hold $53 billion, or six percent of the total; and the non-farm non-corporate business holds $15 billion, or two percent of the total.
Changes In Commercial/Multifamily Mortgage Debt Outstanding
In the fourth quarter of 2013, bank and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $28 billion, or 3.2 percent. CMBS, CDO and other ABS issues increased their holdings of commercial/multifamily mortgages by $11 billion, or 2.1 percent. Finance companies saw the largest decrease of $2 billion or 3.5 percent.
In percentage terms, other insurance (non-life) companies recorded the largest increase in holdings of commercial/multifamily mortgages, at 4.4 percent. State and local government retirement funds saw the biggest decrease, at 17.8 percent.
Changes In Multifamily Mortgage Debt Outstanding
The $11.5 billion increase in multifamily mortgage debt outstanding between the third quarter and fourth quarter of 2013 represents a 1.3 percent increase. In dollar terms, commercial bank and thrifts saw the largest increase in their holdings of multifamily mortgage debt, an increase of $10.4 billion, or 4.1 percent. CMBS, CDO and other ABS issues increased their holdings of multifamily mortgage debt by $1.2 billion, or 1.6 percent. Life insurance companies increased by $434 million, or 0.8 percent. State and local government retirement funds saw the biggest decrease in their holdings of multifamily mortgage debt, by $451 million, or 17.8 percent.
In percentage terms, commercial banks recorded the largest increase in holdings of multifamily mortgages, at 4.1 percent. State and local government retirement funds saw the biggest decrease, at 17.8 percent.
Changes In Commercial/Multifamily Mortgage Debt Outstanding During 2013
Between December 2012 and December 2013, commercial banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $62 billion, or 7.4 percent. Finance companies decreased their holdings of commercial/multifamily mortgages by $5 billion, or 10.0 percent.
In percentage terms, the other (non-life) insurance companies saw the largest increase in their holdings of commercial/multifamily mortgages, an increase of 29.9 percent. State and local government retirement funds saw the largest decrease, at 29.7 percent.
Changes In Multifamily Mortgage Debt Outstanding During 2013
The $37 billion increase in multifamily mortgage debt outstanding during 2013 represents a 4.3 percent increase. In dollar terms, commercial banks saw the largest increase in their holdings of multifamily mortgage debt - an increase of $28.7 billion, or 12.2 percent. CMBS, CDO and other ABS issues saw a decrease of $5.6 billion in their holdings, or 6.9 percent.
In percentage terms, REITs recorded the largest increase in their holdings of multifamily mortgages, 41.1 percent, while finance companies saw the largest decrease, 29.9 percent.
