The Mortgage Bankers Association’s (MBA) monthly Commercial Real Estate Finance loan performance survey showed a decline in the delinquency rates for mortgages backed by commercial and multifamily properties.
“Commercial and multifamily mortgage delinquencies declined in July, hitting the lowest point since the onset of the pandemic,” MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in a release. “Loan performance continues to be very property-type dependent, with lodging loans still the hardest hit but showing strong improvement. Office properties saw a decline in overall delinquencies, but there was an uptick in loans that are newly delinquent. The strength of the economy should continue to support most property types in the coming months.”
The balance of lodging loans that were delinquent in July 2021 was at 16.5 percent, down from 17.6 percent in June. For office property loans, there was a slight decrease in delinquency month-over-month, with 3.2 percent of loans being noncurrent in July, compared with 3.5 percent the month before. Additional balances information included: retail loan delinquencies saw a month-over-month decrease from 10 percent to 9 percent; industrial property loans dropped from 3.1 percent in June to 1.8 in July; and the multifamily noncurrent balance went from 2.1 percent to 1.5 percent.
Overall, 8.2 percent of commercial mortgage-backed securities were noncurrent in July 2021, unchanged from June. Noncurrent rates for other capital sources varied: 2.8 percent of Federal Housing Administration multifamily and health care loan balances were noncurrent, up from 2.7 percent the month before; 1.7 percent of life company loan balances were noncurrent, down from 3.2 percent; and 0.9 percent of government-sponsored enterprise loan balances were noncurrent, down from 1 percent.
When looking at loans by the amount of time they have been delinquent, the survey showed 2.9 percent of commercial and multifamily mortgages were over 90 days delinquent or in real estate owned in July, down from 3 percent in June; 0.2 percent were 60 days to 90 days delinquent, unchanged month-over-month; 0.3 percent were 30 days to 60 days delinquent, down from 0.6 percent; and 1.1 percent were less than 30 days delinquent, unchanged from the month before.