Mixed picture for commercial mortgage delinquencies keeps lenders on edge

Fannie Mae’s rate rose to 0.68%, Freddie Mac’s to 0.51%, and CMBS delinquencies climbed to 6.59%, highlighting continued strain in securitized pools tied to weaker assets. Together, those investors held more than 80% of commercial mortgage debt outstanding.

“Commercial mortgage delinquencies increased for CMBS and GSE loans in the third quarter and decreased slightly for banks and life companies as pressures remain in certain segments of the market,” said Reggie Booker, MBA’s associate vice president of commercial real estate research.

“Property values have stabilized, but loan performance is impacted by shifting property fundamentals, including higher vacancy rates and slower rent growth. Delinquency performance remains highly dependent on property type and loan structure.”

Market still digesting rate and sector shocks

The latest figures followed a volatile 18‑month stretch in which overall commercial mortgage delinquency rates “increased during the final three months of 2024, with increases across most capital sources and property types,” said MBA chief economist Mike Fratantoni, pointing to office as facing “the most challenging combination of weaker fundamentals and stubbornly high interest rates”.

More recently, delinquency rates for mortgages backed by commercial properties “decreased during the third quarter of 2025 compared to the prior quarter,” according to MBA’s broader CREF Loan Performance Survey, which covered $2.8 trillion in loans and 57% of commercial and multifamily mortgage debt outstanding.