Mortgage Delinquencies Decline Modestly in Q3, But Remain Elevated Year-Over-Year

On Thursday, the Mortgage Bankers Association (MBA) reported the results of its National Delinquency Survey for mortgage loans on one-to-four-unit residential properties. In Q3, the delinquency rate for these properties decreased slightly to a seasonally adjusted rate of 3.92% of all loans outstanding at the end of Q3 compared to one year ago.

MBA notes that the delinquency rate was down 5 basis points from Q2 but up 30 basis points from one year ago. The percentage of loans on which foreclosure actions were started in Q3 rose by 1 basis point to 0.14%.

Adding background and analysis to the National Delinquency Survey, MBA Vice President of Industry Analysis Marina Walsh said:

“Mortgage delinquencies have inched up over the past year. Even though there was a small, third-quarter decline in the overall delinquency rate compared to the previous quarter, this was driven by a decrease in 30-day delinquencies. Later-stage delinquencies rose last quarter, and overall delinquencies were up thirty basis points from one year ago.

While delinquencies remain low by historical standards, the composition of loans in delinquency is changing, with more 60-day delinquencies and 90-day+ delinquencies across all major loan types, compared to last quarter and one year ago.”

Walsh further noted that the effects of Hurricanes Helene and Milton will likely appear in the next reporting period of the National Delinquency Survey, given the timing of the storms at the end of September and beginning of October.