Delinquency rate down 40 basis points from Q4 and 55 basis points from a year ago.

Mortgage delinquency rates fell to near-historic lows in the first quarter, the Mortgage Bankers Association reported. The MBA National Delinquency Survey said the delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 3.56 percent of all loans outstanding at the end of the first quarter, down 40 basis points from the fourth quarter and down 55 basis points from a year ago. The percentage of loans on which foreclosure actions started in the first quarter rose by 2 basis points to 0.16 percent. By loan type, the delinquency rate for conventional loans decreased by 34 basis points to 2.44 percent from the fourth quarter. The FHA delinquency rate decreased by 134 basis points to 9.27 percent, while the VA delinquency rate decreased by 18 basis points to 3.98 percent. “The mortgage delinquency rate fell to its lowest level for any first quarter since MBA’s survey began in 1979 and was the second- lowest quarterly rate overall, just 11 basis points above the survey low in the third quarter of 2022,” said Marina Walsh, CMB, MBA Vice President of Industry Analysis. “Mortgage delinquencies and the unemployment rate continue to track each other closely, with the unemployment rate in April falling back to the 54-year low of 3.4 percent set in January.” Walsh said consistent with the resilient job market, “the performance of existing mortgages is exceeding expectations. The MBA forecast calls for an economic slowdown and an increase in unemployment later this year and into next year. Looking forward, Walsh noted that the end of COVID-19 forbearance programs means some distressed borrowers may be offered different forbearance and loss mitigation options than those given during the pandemic.

Source: MBA