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“Compared to the first quarter, third-quarter delinquency rates were up, driven by increases in later stage delinquencies and Foreclosure/REO properties. It is worth watching this portion of the market the rest of the year amidst broader economic uncertainty,” Ricks said.
The MBA survey, which covered $2.8 trillion in loans as of September 30 and represented 57% of the total commercial and multifamily mortgage debt outstanding, found that the share of loans not current fell from the previous quarter. However, the data revealed a mixed picture across property types and capital sources.
CMBS delinquencies rise as other sectors stabilize
Among capital sources, CMBS loans continued to show the most stress. The share of CMBS loan balances 30 days or more delinquent climbed to 5.66% in Q3, up from 5.14% in Q2.
By contrast, delinquency rates for life company loans edged up to 1.45% from 1.40%, while government-sponsored enterprise (GSE) loan delinquencies remained nearly flat at 0.64%. FHA-insured multifamily and health care loan delinquencies dropped from 1.04% to 0.79%.
Property type performance diverged
The survey highlighted that while office, retail, industrial, and lodging properties saw improvements, multifamily and health-related loans experienced a rise in delinquencies.
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