According to the Mortgage Bankers Association’s most recent Commercial Delinquency Report, U.S. commercial mortgage delinquencies increased during the fourth quarter of 2023.

“Commercial mortgage delinquency rates increased again during the fourth quarter of 2023,” according to Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. Woodwell also notes that all major capital sources have seen increases, as higher interest rates, uncertainty regarding property values, and challenges to property fundamentals work their way through markets.

MBA’s quarterly analysis examines commercial delinquency rates across five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies and Fannie Mae/Freddie Mac. Together, these groups hold more than 80 percent of commercial mortgage debt outstanding. MBA’s analysis incorporates measures used by each investor group to measure loan performance. As each investor group tracks delinquencies differently, delinquency rates cannot be compared across groups. For instance, Fannie Mae counts loans receiving payment forbearance as delinquent while Freddie Mac excludes these loans if the borrower complies with its forbearance agreement.

Delinquency rates were determined for each group based on the unpaid principal balance (UPB) of loans as of the fourth quarter of 2023; as follows:

Banks and thrifts (90 or more days delinquent or in non-accrual): 0.94 percent, an increase of 0.09 percentage points since the third quarter of 2023; Life company portfolios (60+ days delinquent): 0.36 percent – an increase of 0.04 percentage points since 2023’s third quarter;
Fannie Mae (60 or more days delinquent): 0.46 percent, down 0.08 percentage points from the third quarter of 2023;
Freddie Mac (60 or more days delinquent): 0.28 percent (up 0.04 percentage points);
CMBS (30 or more days delinquent or REO): 4.30 percent, an increase of 0.04 percentage points since the third quarter of 2023.