Mortgage Delinquencies Grow in 2023Q4

On Thursday, The Mortgage Bankers Association (MBA) released the details of its latest National Delinquency Survey (NDS). According to the NDS, the delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.88% of all loans outstanding at the end of 2023Q4.

The delinquency rate was up 26 basis points from Q3 but was down 8 basis points from 2022Q4. According to the MBA, the historical average for the seasonally adjusted mortgage delinquency rate from 1979 through 2023 is 5.25%. Also of note, FHA delinquencies were up 131 basis points.

The percentage of loans on which foreclosure actions were started in Q4 remained unchanged at 0.14%.

In remarks accompanying the results of the report, MBA Vice President of Industrial Analysis Marina Walsh said:

“Mortgage delinquencies increased across all product types for the second consecutive quarter. While the overall delinquency rate is still very low compared to the historical average, the pace of new loans entering delinquency picked up and some loans moved into later stages of delinquency. The resumption of student loan payments, robust personal spending, and rising balances on credit cards and other forms of consumer debt, paired with declining savings rates, are likely behind some borrowers falling behind at the end of 2023.

The labor market is still quite resilient with the unemployment rate—strongly correlated with mortgage performance—remaining at 3.7% in January. Any weakening in employment conditions would likely lead to more borrowers falling behind on their payments in the coming quarters.”