Outstanding balances of commercial and multifamily residential mortgages in the United States recorded notable growth in the third quarter of 2025, reflecting the resilience of apartment financing despite economic challenges. Total debt rose by about $53.4 billion, or 1.1%, to reach $4.93 trillion, with multifamily housing finance accounting for more than 75% of the increase.
Multifamily real estate debt increased by 1.8%, or $40.3 billion, to $2.24 trillion, representing 22.5% of total commercial mortgage debt. This further enhances the sector’s appeal to lenders seeking stable returns amid turbulence in the office market and other real estate segments.
Government-sponsored capital continued to dominate, with federally backed holdings rising by about $27.8 billion. Banks and insurance companies also increased their investments, while commercial mortgage-backed securities (CMBS) recorded weaker growth.
Banks topped the list of holders of commercial mortgage debt with $1.8 trillion, accounting for 37% of the market, followed by government agencies with $1.11 trillion and insurance companies with $783 billion.
In the apartment sector, government agencies dominated with 50% of the total $1.11 trillion in debt, while banks held $651 billion and insurance companies $263 billion.
Quarterly data showed the sector’s reliance on government capital, with agencies posting the fastest growth at 2.6%, while banks and insurance companies increased their investments by less than 1% and 1.6%, respectively. In contrast, real estate investment trusts (REITs) reduced their holdings.
Multifamily real estate debt grew faster than other property sectors, recording an annual increase of 6%, compared with 4% for total commercial mortgage debt, underscoring the attractiveness of apartment financing amid broader market challenges and rising interest rates.
