Commercial/Multifamily Debt Outstanding Declined in Quarter

Multifamily and commercial debt outstanding combined dropped in the first quarter but the multifamily component increased a bit, according to a recently released Mortgage Bankers Association analysis of Federal Flow of Funds data. While commercial/multifamily debt dropped by $31 billion or 0.9% to $3.31 trillion between the fourth quarter of 2009 in the first quarter of this year, multifamily jumped by $3 billion or 0.4% to $852 billion. "Low levels of commercial mortgage borrowing mean that property investors are paying off and paying down more in mortgages than they are taking out," said Jamie Woodwell MBA's vice president of commercial real estate research. "The balance of construction loans at banks, and commercial and multifamily mortgages held in CMBS and by life insurance companies, saw the largest declines. The balance of multifamily mortgages backed by Fannie Mae, Freddie Mac and FHA saw the largest increase."