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Multifamily Delinquencies Remain Elevated as Agency Lending Expands
Article originally posted on Globe St on Oct 6 2026
Freddie Mac’s serious delinquency rate reached 0.64% in August, a level the Mises Institute describes as its highest in more than two decades—a warning for investors already contending with weak rent growth, rising operating costs and difficult refinancing.
The two agencies are not moving in lockstep. Fannie Mae’s delinquency rate declined in August and is below where it started the year. But it remains more than twice its December 2022 level, suggesting that the recent improvement has not erased the financial strain on borrowers.
For apartment investors, the concern extends beyond missed payments. Properties must support more expensive debt while landlords face pressure on both rental income and operating margins.
Freddie Mac’s Delinquencies Keep Climbing
Freddie Mac’s multifamily serious delinquency rate, which measures loans at least 60 days past due, rose from 0.43% in January to 0.64% in August. The increase gathered pace over the summer, with the rate climbing from 0.51% in June to 0.60% in July before rising again in August.
The Mises Institute’s analysis compared August readings across years and identified August 2011 as the previous peak.
Fannie Mae’s figures show a different pattern. Its serious delinquency rate began the year at 0.73%, reached 0.78% in March and then generally declined. After edging up to 0.62% in July, it fell to 0.57% in August.
That is an improvement, but the longer-term comparison is less reassuring. Fannie Mae’s rate was just 0.24% in December 2022.
Agency Lending Expands Despite Borrower Stress
These delinquency figures cover the agencies’ existing portfolios, not simply their newest loans. Together, Fannie Mae and Freddie Mac account for about 23% of outstanding multifamily mortgage debt, the second-largest share.
Their role in new lending could be considerably larger. According to the Mises analysis, both agencies expanded their activity “aggressively” in 2026 and could account for almost half of newly originated multifamily loans.
That makes the distinction between portfolio performance and new lending important. The delinquency figures reflect loans accumulated over time, while the agencies’ growing origination activity points to their expanding role in financing the sector.
Weak Rent Growth Meets Higher Costs
The Mises analysis links elevated delinquencies to slowing rent growth and weakening rental demand as employment stagnates and households face higher costs outside housing.
It also points to Bureau of Labor Statistics data showing that inflation-adjusted average hourly earnings declined year over year for five consecutive months. That pressure on household budgets could prolong the weakness in rental demand, the analysis suggests.
Landlords, meanwhile, face higher costs for utilities, taxes, insurance, maintenance and repairs. Slower rent growth leaves less room to absorb those increases.
Supply adds another constraint. As GlobeSt.com has reported, historically high construction deliveries in 2024 and 2025 pushed apartment inventory ahead of demand. Absorption has not been sufficient to bring supply and demand back into a more normal balance.
Refinancing Adds Another Layer Of Pressure
Those operating pressures become harder to manage when a loan comes due. Higher interest rates have complicated refinancing, particularly for properties financed during the Covid-era period of near-zero rates and higher leverage.
A recent jump in the 10-year Treasury yield, which closed at 5.31% on Monday, adds pressure to financing costs.
For owners whose properties already struggle to cover expenses and debt payments, replacing an existing loan may offer less relief than it once did. As the Mises analysis puts it, “This overall trend will make it much more difficult for many overextended multifamily owners to ‘extend and pretend’ with new loans.”
Fannie Mae’s recent improvement offers some encouragement. But Freddie Mac’s rising delinquencies show that borrower stress is still building in part of the agency-backed market, with refinancing challenges compounding the squeeze on property income.