The four largest investment groups during the quarter were banks and thrifts; federal agency and government-sponsored enterprise (GSE) portfolios and mortgage backed securities (MBS); life insurance companies; and commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO), and other asset-backed securities (ABS) issues, according to the report. Commercial banks hold the largest share of mortgages at 38%, or $1.8 trillion, while agency and GSE portfolios hold 22%, or $1.07 trillion in mortgage debt. Life insurance companies hold $752 billion, or 16%, of mortgage debt, and CMBS, CDO and other ABS issues hold $642 billion, or 13%.
Agency and GSE portfolios and MBS hold half of the total multifamily debt outstanding at $1.07 billion, followed by banks and thrifts with a 30% share at $639 billion. Life insurance companies hold 11% of multifamily debt outstanding at $242 billion, state and local governments hold 4% at $94 billion, and CMBS, CDO and other ABS issues hold 3% at $62 billion, the report said.
CMBS, CDO and other ABS issues gained the most in dollar terms of commercial and multifamily mortgage debt – $16.2 billion, or 2.6%. Banks and thrifts increased their holdings by 0.7%, or $13.1 billion, agency and GSE portfolios and MBS increased their holdings by 0.7%, or $7.5 billion, and life insurance companies increased their holdings by 0.8%, or $6.1 billion.
In percentage terms, REITs saw their holdings increase the most, by 4%, while private pension funds saw their holdings decrease by 10.6%.
Banks and thrifts posted the largest dollar gains in multifamily mortgage debt, increasing by $10 billion, or 1.6%. This was followed by agency and GSE portfolios and MBS, which increased their holdings by $7.5 billion, or 0.7%. Life insurance companies increased their multifamily mortgage debt holdings by $1.9 billion, or 0.8%. REITs saw the largest percentage increase in their holdings of multifamily mortgage debt, up 10.9%. Meanwhile, private pension funds saw the largest decline in their holdings of multifamily mortgage debt at 12.7%.