August 16, 2024 – The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted 3.97% at the close of the second quarter of 2024, as reported by the Mortgage Bankers Association (MBA) in its National Delinquency Survey. This marks a 3 basis point increase from the previous quarter and a notable 60 basis point rise compared to the same period last year.
Key Findings
- Overall Increase in Delinquencies: The MBA noted that delinquencies have increased across all mortgage product types year-over-year. While the current delinquency rates remain low by historical standards, the uptick aligns with a rise in unemployment, which has historically impacted mortgage performance. Marina Walsh, MBA’s Vice President of Industry Analysis, stated, “The increase in mortgage delinquencies reflects broader economic pressures, particularly as unemployment rises.”
- Delinquency Breakdown: The survey revealed that the increase in delinquencies is primarily driven by early-stage delinquencies—specifically, loans that are 60 days or less past due. Conversely, seriously delinquent loans (90 days or more delinquent or in foreclosure) have decreased to their lowest levels since 1984, thanks to servicers’ efforts to assist at-risk homeowners through various workout options.
- Specific Rates: The delinquency rates for various stages of delinquency showed mixed results. The 30-day delinquency rate rose by 1 basis point to 2.26%, while the 60-day rate increased by 3 basis points to 0.70%. The 90-day delinquency rate, however, saw a decrease of 1 basis point to 1.01%.
- Loan Type Variations: By loan type, conventional loans experienced a 2 basis point increase in delinquency rates to 2.64%, while FHA loans surged by 21 basis points to 10.60%. VA loans saw a slight decrease of 3 basis points, landing at 4.63%.
- Foreclosure Trends: The percentage of loans in the foreclosure process decreased to 0.43%, down 3 basis points from the previous quarter and 10 basis points from the same time last year. The seriously delinquent rate, which includes loans 90 days or more past due, was recorded at 1.43%, showing a decrease both quarterly and annually.
- Regional Variations: The states experiencing the most significant quarterly increases in delinquency rates included Mississippi (up 58 basis points), Louisiana (54 basis points), Indiana (53 basis points), Ohio (53 basis points), and West Virginia (52 basis points).
Conclusion
The rise in mortgage delinquencies in the second quarter of 2024 signals growing financial strain among homeowners, influenced by economic factors such as unemployment and rising living costs. While the overall delinquency rates remain historically low, the increase in early-stage delinquencies warrants attention from lenders and policymakers as they navigate the evolving housing market landscape.
