Commercial and multifamily mortgage debt increased by $46 billion in the fourth quarter of 2016, a 1.6% increase from the third quarter and a 5.8% increase year-over-year, according to the Mortgage Bankers Association (MBA).

Commercial and multifamily debt outstanding hit a total of $2.96 trillion at the end of the fourth quarter. Multifamily mortgage debt rose by $1.4 trillion, marking an increase of $27.3 billion or 2.4% from the third quarter of 2016.

“Commercial and multifamily mortgage debt outstanding grew roughly in line with property values in 2016,” said Jamie Woodwell, Vice President of Commercial Real Estate Research for MBA. “With property values up eight percent, the amount of mortgage debt outstanding grew six percent. Looking just at multifamily properties, an 11 percent increase in property values was met with a ten percent increase in mortgage debt.”

Woodwell continued, “After years of property prices outpacing mortgage debt growth, we expect the two to move in concert going forward. During the recession, property prices declined by roughly 40%. Because debt is ‘stickier’ and outstanding loan balances don’t automatically adjust to changes in prices, [mortgage debt outstanding] remained stable. In the years since, prices bounced back and now exceed their pre-recession levels, while [mortgage debt outstanding] – which hasn’t declined – rose at a much slower pace. The ratio between the two is now back to where it was before the recession.”

Three out of the four major investor groups MBA looks at for this report saw an increase in total commercial and multifamily mortgage debt with only commercial mortgage-backed securities seeing a decline.

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