CMBS Delinquencies Rise To 7.28% In Q1

Commercial mortgage delinquencies were mixed during the first quarter of 2026, with commercial mortgage-backed securities (CMBS) showing the most significant deterioration while other major investor groups continued to post relatively healthy loan performance, according to the Mortgage Bankers Association’s (MBA) latest Commercial Delinquency Report.

The report highlights an ongoing divide in the commercial real estate finance market. While higher borrowing costs and refinancing challenges continue to weigh on certain property sectors, particularly those financed through CMBS, delinquency rates across banks, life insurance companies, Fannie Mae, and Freddie Mac remain relatively low by historical standards.

“Commercial mortgage loan performance varied across capital sources during the first three months of the year,” said Reggie Booker, MBA’s associate vice president of commercial research.

“While overall loan performance remains relatively healthy, increases in CMBS and Fannie Mae delinquencies point to continued pressure from higher borrowing costs, refinancing challenges, and weaker conditions in some segments of the commercial real estate market,” Booker said. “At the same time, delinquency rates for bank and Freddie Mac loans were stable or declined, reflecting the broader resilience of the market.”

MBA’s quarterly analysis tracks delinquency rates across the five largest sources of commercial real estate debt capital: commercial banks and thrifts, life insurance companies, CMBS, Fannie Mae, and Freddie Mac. Together, those groups account for more than 80% of all commercial mortgage debt outstanding.

Among the major investor groups, CMBS loans recorded the highest delinquency rate by a wide margin. The CMBS delinquency rate climbed to 7.28% at the end of the first quarter, up from 6.58% in the fourth quarter of 2025. The increase of 70 basis points marked the largest quarterly deterioration among the groups tracked by MBA.

Fannie Mae’s delinquency rate rose to 0.78%, up from 0.74% in the prior quarter, while life insurance company portfolios increased to 0.38% from 0.32%.

Banks and thrifts saw a slight uptick, with their delinquency rate rising one basis point to 1.24%.

Freddie Mac was the lone major investor category to improve during the quarter. Its delinquency rate declined slightly to 0.43%, down from 0.44% at the end of 2025.

MBA cautioned that delinquency rates should not be directly compared across investor groups because each uses different reporting standards and definitions. For example, CMBS loans are considered delinquent after 30 days, while bank-held commercial mortgages are measured at 90 days delinquent or in non-accrual status. Fannie Mae also includes certain loans in forbearance as delinquent, while Freddie Mac excludes borrowers who remain compliant with their forbearance agreements.

The latest figures suggest that lenders continue to work through the impact of elevated interest rates on commercial real estate borrowers. Many properties financed during the ultra-low-rate environment of 2020 and 2021 are now approaching maturity and facing significantly higher refinancing costs.

That pressure has been particularly evident in the CMBS market, where office properties and other challenged asset classes have faced declining valuations, weaker occupancy trends, and more difficult refinancing conditions.

Still, the broader picture remains one of relative stability. Excluding CMBS, delinquency rates across the major investor groups remain below 1.25%, indicating that most commercial borrowers continue to meet their debt obligations despite a higher-rate environment and ongoing economic uncertainty.

What It Means

For mortgage professionals active in commercial and multifamily lending, the report reinforces two realities shaping the market in 2026.

First, refinancing risk remains a central concern. Borrowers with loans maturing in today’s higher-rate environment may face payment shocks, reduced proceeds, and tighter underwriting standards, particularly in property sectors facing operational headwinds.

Second, the divergence between CMBS performance and other capital sources highlights how loan structure and property type continue to influence risk. While bank, agency, and insurance company portfolios have remained relatively resilient, CMBS lenders continue to experience greater stress tied to legacy loans and challenged commercial property segments.

The data may also provide reassurance for multifamily lenders. Despite modest increases at Fannie Mae and a slight decline at Freddie Mac, agency delinquency rates remain well below 1%, underscoring the continued strength of the multifamily sector compared with other areas of commercial real estate.

For lenders, servicers, and investors, the first-quarter results suggest that commercial real estate fundamentals remain largely intact, but that refinancing pressures and elevated borrowing costs are likely to keep delinquency trends under close scrutiny throughout the remainder of 2026.