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**Commercial Mortgage Delinquency Rates Decline in Q3 2025 Despite Mixed Trends Across Property Types**
After a notable spike in the second quarter, commercial mortgage delinquency rates saw an overall decline in the third quarter of 2025, according to the Mortgage Bankers Association (MBA). The total balance of non-current commercial mortgages also decreased during the period. However, the improvement was not evenly distributed, as some property sectors and capital sources reported rising delinquencies.
“Compared to the first quarter, third-quarter delinquency rates were up, driven by increases in later-stage delinquencies and foreclosure/REO properties,” said Judie Ricks, MBA’s Associate Vice President of Commercial Real Estate Research. “It is worth watching this portion of the market the rest of the year amidst broader economic uncertainty.”
Multifamily and healthcare properties experienced higher delinquency rates in Q3, while the late-pay rates for office, industrial, retail, and lodging properties improved.
Among capital sources, commercial mortgage-backed securities (CMBS) posted the highest delinquency rate, climbing by 52 basis points to 5.66% in the third quarter. On the other end of the spectrum, government-sponsored enterprises Fannie Mae and Freddie Mac recorded the lowest delinquency rates at 0.64% and 0.79%, respectively.
As the commercial real estate market continues to navigate economic challenges, industry analysts will be closely monitoring delinquency trends in the coming months.
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