Delinquency rates for mortgages backed by commercial and multifamily properties continued to decline this year, according to reports released Thursday by the Mortgage Bankers Association.
And NCUA data showed the trend also held for the 10 largest credit unions through March.
The MBA’s monthly Commercial Real Estate Finance (CREF) Loan Performance Survey found 3.3% of mortgages backed by commercial and multifamily properties were at least 60 days delinquent in May, down from 3.5% in April.
Jamie Woodwell, the MBA’s vice president of commercial real estate research, said commercial and multifamily mortgage delinquency rates ticked down in May to the lowest level since COVID-19 was declared a pandemic in March 2020.
“Pockets of elevated stress remain in loans backed by lodging and retail properties, driven by loans in the later-stages of delinquency and foreclosure or REO,” Woodwell said. “Quarterly measures of delinquency rates between last year’s fourth quarter and this year’s first quarter show a drop in distress across nearly every capital source.”
The trend was consistent with the MBA’s quarterly Commercial/Multifamily Delinquency Report, also released Thursday.
The MBA found commercial and multifamily mortgage delinquency rates fell from the fourth quarter of 2020 to the first quarter of 2021 among each of the five capital sources reporting: Banks and thrifts, life insurance company portfolios, Fannie Mae, Freddie Mac and commercial mortgage backed securities (CMBS).
The Top 10 credit unions held $8.6 million in real estate-backed commercial loans that were at least 60 days delinquent as of March 31, or 0.15% of their $5.8 billion portfolio. That was down not only from the 0.29% delinquency rate of March 2020, but it was also lower than March 2019′s 0.55% rate.
In 2020, delinquency rates for credit unions’ real-estate backed commercial mortgages peaked at 0.41% in the second quarter and fell to 0.24% by year’s end.
Credit unions’ share of all real estate-backed commercial loans was 2.28% at the end of 2020, up from 2.07% a year earlier.
Including loans that were just one day or more late, the MBA’s monthly survey found 4.8% of all commercial and multifamily mortgages were delinquent in May, down from 4.9% in April. By type, overall delinquency rates in May were:
- 20.0% for lodging loans, down from 20.2% in April.
- 9.5% for retail loan balances, up from 9.3% in April.
- 2.4% for office property loans, down from 2.6% in April.
- 1.9% for industrial property loans, unchanged from April.
- 1.8% for multifamily buildings, up from 1.7% in April.