Fannie Mae and Freddie Mac (also called “GSEs”) have launched their April experiences on their mortgage portfolios and mortgage delinquencies. Each Fannie and Freddie report that severe delinquencies in multifamily are rising to multiyear highs.
(These numbers replicate the situation of mortgages in every company’s portfolio, that are a significant a part of the general mortgage market. Practically half of the multifamily mortgage market are a part of GSE portfolios.)
For April, critically delinquent multifamily mortgages (90+ days delinquent) rose to 0.68 %. That’s up from March’s complete of 0.63 %, and it was up from April 2024’s complete of 0.44 %. Fannie’s delinquency fee has risen shortly since December 2022 when the speed was 0.24 %. Excluding the covid panic, Fannie’s delinquency fee is now the very best since 2010, however stays under the Nice-Recession excessive of 0.8 %.
Freddie Mac’s delinquency report, alternatively, reveals delinquencies above the Nice-Recession peak. Throughout April, Freddie reported multifamily severe delinquency fee was 0.45 %. That’s down barely from March 2025, however properly up from April 2025’s degree of 0.35 %.
Evaluating for April of every 12 months, April 2025’s delinquency fee exceeds that of April 2011, the earlier peak 12 months for delinquencies, when April delinquencies reached 0.4 %.
The most recent GSE information additionally displays mortgage delinquency information from different sources. For instance, the Mortgage Bankers Affiliation reported final week:
Business mortgage delinquencies elevated within the first quarter, in line with the Mortgage Bankers Affiliation’s newest Business Mortgage Delinquency Charges Report.
“Business mortgage delinquencies rose throughout all main capital sources within the first quarter of 2025, reflecting rising stress on sure property sectors and mortgage varieties,” mentioned Reggie Booker, MBA’s Affiliate Vice President of Business Actual Property Analysis. “Whereas delinquency charges stay comparatively low for many investor teams, the uptick in CMBS delinquencies indicators heightened stress in components of the market that lack refinancing choices or different challenges.”
MBA’s quarterly evaluation appears at business delinquency charges for the highest 5 capital sources: business banks and thrifts, business mortgage-backed securities (CMBS), life insurance coverage firms, and Fannie Mae and Freddie Mac. Collectively, these buyers maintain greater than 80 % of economic mortgage debt excellent.
Because the MBA’s economist mentions, the continuing rise in multifamily delinquencies is probably going linked to ongoing will increase in rates of interest which result in fewer refinance choices for homeowners of multifamily properties. Not like single-family mortgages that are overwhelmingly fixed-rate mortgages, many multifamily mortgages are adjustable-rate mortgages and regulate upward as mortgage charges rise.
That is related now, in fact, because the 10-year Treasury yield—which is commonly used as a benchmark for setting mortgage charges—gasoline elevated from about 3.65 % in late 2024 to about 4.45 % right this moment.
This isn’t essentially an issue for multifamily housing money move since excessive rates of interest additionally are inclined to push first-time homebuyers out of the for-purchase market and into multifamily rental housing. Probably, this permits for multifamily homeowners to boost rents as putative homebuyers flip to multifamily housing as an alternative.
But, there may be good purpose to imagine that multifamily homeowners can’t merely elevate rents in our presently stagnating financial system. Because the Federal Reserve admitted in its Beige Ebook abstract final week, half of the US is experiencing an financial system in decline, and retail layoffs had soared by practically 300% to this point this 12 months. The Convention Board’s main financial index continues to transfer towards recession territory.
So, situations are usually not precisely best for landlords elevating rents to make up for rising rates of interest on multifamily mortgages.
Neither is there possible any aid in sight when it comes to rates of interest. The Trump administration’s continued embrace of mega-deficits will flood the financial system with rising ranges of presidency debt, inflicting extra competitors for mortgage-backed securities which is able to push down bond costs, thus pushing up rates of interest additional. The present upward pattern in multifamily delinquencies is prone to proceed.
