Multifamily Delinquencies Decline in Q2 Despite Rising Credit Losses
In the second quarter of 2026, bank-held multifamily delinquencies decreased slightly to 1.41% from a multi-year high of 1.47% recorded in the first quarter. This decline was primarily driven by improvements in early-stage delinquencies; however, loans that were more than 90 days overdue increased to 1.10%. Annualized net charge-offs also rose significantly to 0.32%, nearly doubling from previous levels. CRED iQ's analysis revealed underlying stress within the multifamily sector as operating expenses grew faster than income at median securitized properties, leading to a modest increase in NOI of just 0.2%. This trend was particularly pronounced in markets like Denver, Seattle, and San Francisco where expense growth outpaced income gains. The mixed signals from Q2 suggest that while the headline delinquency rate improved, deeper financial pressures persist within the sector. These include rising credit losses and a fragile operating environment for multifamily properties.
Topics: Bank portfolios Commercial real estate Credit risk Delinquencies