The Mortgage Bankers Association (MBA) reported that multifamily mortgage debt outstanding rose by $27.70 billion in Q2 from the revised level of the quarter before. Total multifamily debt reached a level of $2.195 trillion. Compared to the year-earlier level, debt was up $100.8 billion (4.8 percent).
The growth in multifamily mortgage debt outstanding in Q2 was up 39.4 percent from the growth originally reported for Q1. However, since the debt outstanding in Q1 was revised higher by $7.82 billion in the latest report, the growth in Q2 is effectively unchanged from the revised level of growth in Q1.
The total of all commercial mortgage debt, including multifamily debt, outstanding at the end of Q2 rose 1.0 percent from its revised Q1 level to $4.875 trillion. Multifamily mortgage debt represented 45.0 percent of commercial mortgage debt outstanding.
Earlier, the MBA had reported that multifamily mortgage originations had fallen 35 percent year-over-year in Q2. The Q2 2025 multifamily originations index was reported to be down 41 percent from its level in Q1.
Pieces of the pie
The shares of multifamily mortgage debt held by various classes of suppliers are shown in the first chart, below.
The largest share of multifamily debt was held by “Agency and GSE portfolios and MBS”. These are agencies, like the Federal Housing Administration and Government Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac, who buy up mortgages and sell some of the debt as Mortgage-Backed Securities (MBS). At the end of Q2, the GSEs’ share of outstanding multifamily mortgage debt fell 0.3 percentage points from the revised level of the quarter before to 49.2 percent of the total outstanding. The GSEs held $1,080 billion in multifamily debt at the end of the quarter, up $8.75 billion.
Banks and thrifts, the second largest holders of multifamily mortgages, increased their multifamily mortgage holdings by $5.54 billion from the revised level of the quarter before to $648.5 billion. However, their share of outstanding debt fell 0.1 percentage point to 29.4 percent.
Life insurance companies were reported to increase their direct holding of multifamily mortgage debt by an unusually large $14.15 billion from the revised level of the quarter before. They held $256.3 billion in mortgages at the end of the quarter. Their share of total multifamily mortgage debt outstanding rose 0.5 percentage points from the revised level of the quarter before to 11.7 percent. However, this figure does not account for the multifamily mortgages these companies hold through commercial mortgage-backed securities (CMBS).
State and local governments held 4.3 percent of outstanding multifamily mortgage debt at the end of Q2, unchanged from the revised level reported for the previous quarter. Their holdings were reported to be unchanged at $93.47 billion at the end of the quarter.
CMBS, CDO (collateralized debt obligations) and other ABS (asset backed securities) issuers decreased their holdings of multifamily mortgage debt in Q2 by $302 million to $67.69 billion. Their share of multifamily debt outstanding remained at 3.1 percent.
Who’s growing?
The next chart, below, plots the current share of multifamily mortgage debt outstanding for a given class of lender alongside that class of lender’s share of net new mortgage debt outstanding in Q2. When the latter share is greater than the former, that class of lender is increasing its share of the multifamily mortgage market.
While the GSEs accounted for by far the largest share of the net increase in multifamily mortgage debt outstanding in Q2, their share of the increase was much more modest at 31.6 percent.
Banks and thrifts also increased their holdings in Q2 at a share below that of their current holdings. Their 20.0 percent chare of the increase is well below their 29.4 percent share of the total mortgage debt outstanding.
Unlike last quarter, when banks and thrifts dominated the increase in multifamily mortgage debt outstanding, in Q2 it was life insurance companies that accounted for the majority of the increase. Their increase in multifamily holdings represented 51.1 percent of the total increase.
State and local governments kept their holdings of multifamily debt unchanged in Q2, after revisions to last quarter’s reported level of holdings.
For the second consecutive quarter, of the top 6 classes of businesses holding multifamily mortgage debt, CMBS, CDO and other ABS issuers was the only one to reduce its holdings in Q2.
The report does not cover loans for acquisition, development or construction, or loans collateralized by owner-occupied commercial properties. The full report also includes information on mortgage debt outstanding for other commercial property types. The full report can be found here.
