Securitization in Focus — August 2025

Asset-backed securities

ABS Issuance: YTD Breakdown (%)

Year-to-date (YTD) Asset-Backed Securities (ABS) issuance is tracking just behind 2024’s pace but remains historically strong at $225.8B. Auto ABS continue to dominate more than half of issuance, followed by the Other category, while credit card, equipment and student loan ABS make up smaller slices of the market.

ABS Issuance: 2025 vs 2024 ($B)

Delinquency trends (%)

August remittance data show consumer ABS delinquencies edged higher across multiple sectors, partly reflecting normal seasonal patterns. Despite a softer labor backdrop, overall consumer credit remains resilient, though early signs of stress are emerging in select pockets.

Commercial mortgage-backed securities

CMBS Issuance ($B)

August brought $10.7B in CMBS supply (16 deals total: 12 SASB¹, 2 CRE CLOs², 2 conduits), marking the second-slowest month of 2025 — just ahead of April’s Liberation Day lull — yet still the strongest August since 2017.

YTD, issuance remains firmly ahead of prior years, up 37% vs 2024 and 117% vs 2023. Conduit volumes have recently edged above last year’s pace, while SASB, CRE CLO and Private Label transactions have surged well past 2024 levels as deal flow resumes.

¹Single-Asset Single-Borrower.

²Commercial Real Estate Collateralized Loan Obligations.

Delinquency trends

• For the sixth straight month, the CMBS delinquency rate rose in August, reaching 7.29%. The monthly increase was modest (+6 bps³), but the rate has climbed steadily from 6.30% in February.
• By property type: Multifamily delinquencies rose from 6.15% to 6.86%, Industrial inched up 8 bps to 0.60%, and Office climbed from 11.04% to 11.66%. Lodging dipped slightly (6.59% to 6.54%), while Retail improved more meaningfully (6.90% to 6.42%).
• For context, the 30+ day delinquency rate stood at 5.44% one year ago, hit 6.57% in December 2024, then eased to 6.30% in February 2025 before six consecutive months of increases.
• Seriously delinquent loans (60+ days past due, in foreclosure, real estate owned or non-performing) also ticked higher, up 5 bps to 6.98%.

³Basis points.

Residential mortgage-backed securities

Issuance

Most homeowners still carry mortgages below 5%, but with new originations coming at much higher rates, many are turning to home equity products to access built-up equity. This shift has fueled continued strength in the “Other” sector — home-equity loans/lines and reverse mortgages — alongside Non-QM deals. Together, these categories have driven roughly 60% of non-agency RMBS issuance YTD 2025, even as the gap between the effective mortgage rate and the current 30Y mortgage rate widens.

2025 Monthly Non-Agency RMBS Issuance ($B)

Key
CAS/STACR: Credit Risk Transfer/Structured Agency Credit Risk
Non-QM: Non-qualified mortgages
NPL: Non-Performing Loans
RPL: Re-Performing Loans
SFR: Single-family rentals

Unpaid Principal Balance by Interest Rate (%)

The bulk of outstanding mortgages carry rates below 5%, leaving homeowners reluctant to refinance in today’s higher-rate environment.

Effective vs 30Y Mortgage Rates Diverge (%)

With effective mortgage rates anchored by older low-rate loans, the gap to new 30Y mortgage rates has widened sharply — driving demand for home-equity loans and lines as a way to access built-up equity.