Resilient job market aides in the low mortgage delinquency rates.

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.37 percent of all loans outstanding at the end of the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey. The delinquency rate was down 19 basis points from the first quarter of 2023 and down 27 basis points from one year ago, MBA said. The percentage of loans on which foreclosure actions were started in the second quarter fell by 3 basis points to 0.13 percent. “The seasonally-adjusted mortgage delinquency rate fell to its lowest level since MBA’s survey began in 1979, reaching 3.37 percent in the second quarter of 2023,” said Marina Walsh, CMB, MBA vice president of industry analysis. “Buoyed by a resilient job market, homeowners are continuing to make their mortgage payments.” Walsh noted that delinquencies fell across all mortgage types – conventional, FHA, and VA. Both foreclosure starts and foreclosure inventory also declined relative to the previous quarter. Added Walsh, “Despite low delinquency rates, there are early signs of possible consumer credit stress. Delinquencies are rising for other forms of credit such as credit cards and car loans. In addition, FHA delinquencies rose 10 basis points compared to year ago levels. On a non-seasonally adjusted basis, FHA delinquencies rose 13 basis points year-over-year and 71 basis points from the first quarter of 2023. As the economy slows and the labor market cools, homeowners with FHA loans are likely to feel the distress first. Compared to last quarter, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding. By stage, the 30-day delinquency rate decreased 2 basis points to 1.75 percent, the 60-day delinquency rate remained unchanged at 0.55 percent, and the 90-day delinquency bucket decreased 17 basis points to 1.07 percent. 

Source: The Mortgage Bankers Association