Tracking Delinquency Trends From the GFC to Q1 2025
At CRED iQ, our mission is to provide commercial real estate professionals with the data and insights needed to navigate an ever-evolving market. This week, our research team took a deep dive into loan delinquency trends, expanding our lens from the Global Financial Crisis (GFC) to the present day. By focusing on FDIC-insured commercial banking and savings institutions, which includes community banks, we’ve uncovered critical patterns in CRE loan performance, offering a clearer perspective on today’s marketplace.
Two key segments and what they tell us
Our analysis spans from March 2007 to March 2025, shifting focus from securitized and agency markets to FDIC-insured institutions. We examined two key segments: multifamily properties and “core” CRE, which includes office, retail, hotel, industrial, self-storage and other property types.
This approach builds on our earlier research, providing a comprehensive view of delinquency trends and their implications for the CRE industry.
Key findings from Q1 2025
Our analysis revealed several trends in loan performance:
• Core CRE lending growth slows: The long-term average annual growth rate for core CRE lending balances is 4.55 percent. The first quarter of 2025, however, saw an annualized growth rate of just 1.22 percent, the lowest since 2012, signaling a cautious lending environment.
• Core CRE delinquencies rise: Total delinquencies across core property types reached $31.4 billion in Q1 2025, equating to a 1.7 percent overall delinquency rate. Of this, $25.1 billion are loans 90-plus days delinquent, while $6.3 billion are 30 to 89 days delinquent.
• Net losses decline for core CRE: Net losses in the core sector totaled $3.9 billion in Q1 2025, down from $5.9 billion in the prior quarter, suggesting some stabilization.
• Multifamily losses peak: Multifamily properties reported net losses of $767 million in Q1 2025, the highest quarterly total since 2012, highlighting growing challenges in this sector.
Comparing March 2020 to March 2025
To contextualize recent trends, we compared delinquency metrics from March 2020 to March 2025:
• Multifamily delinquencies surge: Delinquent loan balances in the multifamily sector grew from $1.5 billion (0.3 percent delinquency rate) in 2020 to $9.4 billion (1.5 percent) in 2025. Loans 90-plus days delinquent increased dramatically, from $560 million to $6.71 billion.
• Core CRE delinquencies double: Delinquent loan balances in the core segment rose from $15.4 billion (1 percent) in 2020 to $31.4 billion (1.7 percent) in 2025, with 90-plus day delinquencies climbing from $9.7 billion to $25.1 billion.
These shifts underscore the increasing pressures on CRE loan performance, particularly in the multifamily sector, where rising delinquencies and losses signal heightened risk.
Mike Haas is the founder and CEO of CRED iQ.
