According to the Mortgage Bankers Association (MBA), delinquencies for commercial mortgages saw a slight decrease in the second quarter of 2024. The highest delinquency rate was reported for CMBS loans, although it also showed improvement during Q2.
At the end of the quarter, MBA stated that 97.0% of outstanding loan balances were either current or less than 30 days late, up from 96.8% in Q1. Additionally, there was no change in loans that were more than 90 days delinquent or in REO at 2.5%, while those between 60-90 days decreased from Q1’s rate of .3% to .2%. Loans between30-60 days remained unchanged at .4%.
Jamie Woodwell, head of commercial real estate research at MBA said that most property types experienced a decline in their delinquency rates last quarter except for office properties which saw an increase. However, he noted that this increase seems to be slowing down compared to previous quarters.
Woodwell added that commercial properties are currently adjusting to changes such as interest rates and property values which can vary depending on factors like market conditions and deal terms unique to each property and loan type.
As more loans mature throughout the year, there will likely be further adjustments needed as these new conditions continue to impact different properties differently.
