**Commercial Property Mortgage Delinquencies Edge Up in Q1 2025**
Delinquency rates for mortgages backed by commercial properties saw a slight uptick in the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) latest Commercial Real Estate Finance (CREF) Loan Performance Survey. The report highlighted a mixed performance across property types, with delinquencies rising in the office and lodging sectors, while decreasing for industrial and retail properties. Delinquency levels for multifamily properties remained unchanged.
When broken down by lender type, commercial mortgage-backed securities (CMBS) loans recorded the highest delinquency levels. However, the CMBS delinquency rate slightly declined to 5.2% in Q1. Other segments experienced small increases: life company loan delinquencies rose to 1.0%, up from 0.9% in Q4 2024; GSE (Government-Sponsored Enterprises) loan delinquencies increased to 0.6% from 0.55%; and FHA multifamily and healthcare loan delinquencies climbed to 1.1% from 1.0%.
“The delinquency rate for commercial mortgages increased again in the first quarter of 2025, driven by higher delinquencies on lodging and industrial properties and rising delinquencies on GSE and FHA loans,” said Judie Ricks, MBA’s Associate Vice President of Commercial Real Estate Research. “MBA is closely watching delinquency trends, as there have been increases in both later-stage and new delinquencies. Economic growth is expected to slow in 2025, which could lead to further increases in mortgage delinquencies through the second half of the year.”
