Delinquencies on U.S. commercial mortgages climbed in the second quarter of 2025, with commercial mortgage-backed securities (CMBS) experiencing the sharpest increase, according to the Mortgage Bankers Association’s (MBA) latest Commercial Delinquency Report.
“The delinquency rate for commercial mortgages increased across most major capital sources in Q2,” said Reggie Booker, MBA’s Associate Vice President of Commercial Real Estate Research. “CMBS loans saw the largest jump, reflecting rising delinquencies in both multifamily and office properties. Trends continue to vary by property type, loan structure, geography, and borrower profile.”
The MBA’s quarterly report tracks commercial mortgage performance across the five largest capital sources–commercial banks and thrifts, CMBS, life insurance companies, and Fannie Mae and Freddie Mac–which collectively account for more than 80% of U.S. commercial mortgage debt. The analysis notes that delinquency measurements differ across lenders, limiting direct comparisons. For instance, Fannie Mae counts loans in forbearance as delinquent, whereas Freddie Mac excludes them if borrowers remain compliant with the terms.
At the end of Q2 2025, unpaid principal balance (UPB) delinquency rates were as follows:
- Banks and thrifts (90+ days delinquent or non-accrual): 1.29%, up 0.01 percentage points from Q1.
- Life insurance companies (60+ days delinquent): 0.51%, up 0.04 points.
- Fannie Mae (60+ days delinquent): 0.61%, down 0.02 points.
- Freddie Mac (60+ days delinquent): 0.47%, up 0.01 points.
- CMBS (30+ days delinquent or in real estate-owned status): 6.36%, up 0.45 points.
The widening gap between CMBS delinquencies and those of other lenders highlights ongoing stress in certain segments of the commercial real estate market, particularly office and multifamily sectors that have faced challenges from changing work patterns and elevated borrowing costs.
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