"Rising Commercial and Multifamily Mortgage Debt: Who Bears the Burden?"

Multifamily commercial real estate (CRE) mortgages have increased by 4.4% year-over-year to $2.09 trillion, with the majority (54.8%) held by US government agencies, government-sponsored enterprises, and state and local government entities, putting taxpayers on the hook. US banks and foreign banks hold 29.3%, while life insurers hold 11.3%. The Federal Reserve is more concerned about potential contagion across the banking system than individual bank losses, as the $612 billion in multifamily loans held by US banks represents less than 3% of their total assets. However, some smaller banks with concentrated exposure may face challenges, and the FDIC may need to intervene in such cases.