MBA: Commercial Mortgage Delinquencies Inched Upward in Q1 2025

Delinquency rates for mortgages backed by commercial properties increased slightly in the first quarter of 2025. This is according to the Mortgage Bankers Association’s (MBA) latest commercial real estate finance (CREF) Loan Performance Survey. The survey also found that delinquencies increased for some property types (office and lodging) and decreased for others (industrial and retail) while remaining constant for multifamily.

By lending source, CMBS loans saw the highest delinquency levels, although the rate for CMBS ticked downward slightly in Q1 to 5.2%. MBA reported that 1.0% of life company loan balances were delinquent, up from 0.9% in Q4 2024; 0.6% of GSE loan balances were delinquent, up from 0.55% the previous quarter; and 1.1% of FHA multifamily and healthcare loan balances were delinquent, up from 1.0% the prior quarter.

“The delinquency rate for commercial mortgages increased again in the first quarter of 2025, driven by higher delinquencies on lodging and industrial properties and rising delinquencies on GSE and FHA loans,” said Judie Ricks, MBA’s associate VP of commercial real estate research. “MBA is closely watching delinquency trends, as there have been increases in both later-stage and new delinquencies. Economic growth will slow in 2025, which could lead to further increases in mortgage delinquencies through the second half of the year.”