In the third quarter of 2024, there was a slight increase in delinquency rates for mortgages backed by commercial properties. This information comes from the latest Commercial Real Estate Finance (CREF) Loan Performance Survey conducted by the Mortgage Bankers Association (MBA). Overall, the delinquency rate rose from 3% to 3.2% compared to Q2.
The largest quarterly increase was seen in office loans, which had a delinquency rate of 7.8%, up from 7.1% in Q2. Multifamily loans also saw an uptick of ten basis points to reach a delinquency rate of 1.2%.
On the other hand, there were decreases in delinquencies for lodging, retail and industrial property-backed loans during this time period. Retail experienced high levels of over-10% during the pandemic while lodging reached its peak at over-20%.
According to Jamie Woodwell, head of commercial real estate research at MBA: “The commercial mortgage market is vast and diverse with various factors impacting loan performance such as property type, size and age; geographic markets; borrower types; vintages and more.”
