Commercial/Multifamily Mortgage Debt Outstanding Rises

The level of commercial/multifamily mortgage debt outstanding grew by 0.7% in the fourth quarter of 2008, to $3.5 trillion, according to the Mortgage Bankers Association's analysis of the Federal Reserve Board flow of funds data. The total was an increase of $166 billion, or 5% from the end of 2007. The $3.5 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was an increase of $23 billion from the third quarter of 2008. Multifamily mortgage debt outstanding grew to $900 billion, an increase of $5.4 billion or 0.6% from the third quarter. "Counter to what many expected, investors increased their holdings of commercial and multifamily mortgages during the fourth quarter," said Jamie Woodwell, MBA's vice president of commercial real estate research. "Banks, thrifts, Fannie Mae, Freddie Mac, life insurance companies and other lenders extended additional credit to the market during the fourth quarter, lending more in new commercial and multifamily mortgages than they saw paid off or paid down on existing loans." Commercial banks continue to hold the largest share of commercial/multifamily mortgages at $1.55 trillion, or 44% of the total.