Commercial Real Estate Slows at Credit Unions
Credit unions still increased portfolios at twice the rate of banks and others in Q1.
Credit unions continued to increase their commercial real estate portfolios at a faster pace than banks and others in the first quarter.
A comparison of data from the NCUA and a report released Tuesday by the Mortgage Bankers Association (MBA) showed credit unions have been increasing their commercial real estate balances from quarter to quarter twice as fast for at least the past year as the banks and investors tracked by the MBA.
Credit union balances are also growing at least twice as fast for multi-family loans and twice as fast for the remainder of commercial real estate.
As of March 31, NCUA data showed credit unions held:
- $37 billion in multi-family loans, up 12.8% from a year earlier and up 2.5% from Dec. 31.
- $113.7 billion in other commercial loans, up 10.9% from a year earlier and up 1.6% from Dec. 31.
- $150.7 billion in total commercial loans, up 11.4% from a year earlier and up 1.9% from Dec. 31.
As of March 31, MBA data showed banks and other investors held:
- $2.1 trillion in multi-family loans, up 4.8% from a year earlier and up 1.1% from Dec. 31.
- $2.6 trillion in other commercial loans, up 1.6% from a year earlier and up 0.6% from Dec. 31.
- $4.7 trillion in total commercial loans, up 3% from a year earlier and up 0.9% from Dec. 31.
“The amount of commercial mortgage debt outstanding increased in the first quarter of 2024, despite slow mortgage originations activity,” MBA Head of Commercial Real Estate Research Jamie Woodwell said.
Woodwell said the first-quarter gains in balances occurred despite low mortgage originations.
“Every major capital source increased its holdings of commercial mortgages, as fewer loans than usual were paid off through property sales or refinancings,” he said.
Commercial banks continue to hold the largest share of commercial real estate. As of March 31 they held $1.8 trillion, or 38% of the total. Others include portfolios held by Fannie Mae, Freddie Mac, insurance companies and asset-backed securities.