The rate of growth slowed but U.S. commercial real estate loan delinquencies and default rates marched toward new records in the third quarter.

U.S. banks reported that default rates on commercial real estate mortgages rose by 0.9 percentage point, according to a report released Monday by Real Capital Analytics.

Commercial real estate mortgage payments that were late by 90 days or more rose to 4.36% in the third quarter ended Sept. 30 from 4.27% in the prior quarter, according to U.S. Federal Deposit Insurance Corp statistics.

The rate approached the historic high of 4.55% set in 1992 after 17 consecutive quarterly increases. It was the second-smallest increase in three quarters.

The report was the latest evidence of stabilization in the U.S. commercial real estate market.

The default rate in the second and third quarters of 2006, a boom time in the U.S. commercial real estate industry, was 0.58%.

Standard & Poor's, a credit rating agency, said Monday the delinquency rate for loans behind commercial mortgage-backed securities (CMBS) rose 3% in the third quarter, down a jump of 14.1% in the second and 30.2% in the first. A loan is considered delinquent if it is more than 30 days late.

The balance of banks' commercial real estate mortgages in default stood at $46.8 billion at the end of the quarter.

The default rates were greatest at the largest institutions - those with assets of $10 billion or more.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry