US Mortgage Delinquencies Decreased in Q2, Mortgage Bankers Association Reports

The Mortgage Bankers Association (MBA) on Thursday (8-10-23) released its National Delinquency Survey for 2023Q2. According to the report, the delinquency rate for mortgage loans on one-to-four units residential properties decreased to a seasonally adjusted rate of 3.37% of all loans outstanding.

Compared to Q1, the delinquency rate is down 19 basis points, and it is down 27 basis points year-over-year. The percentage of loans on which foreclosure actions were started in Q2 fell by 3 basis points to 0.13%.

Delinquencies fell across all mortgage types—conventional, FHA and VA. Both foreclosure starts and foreclosure inventory also declined relative to the previous quarter.

Adding additional background and her analysis, MBA Vice President of Industry Analysis Marina Walsh said:

“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. Buoyed by a resilient job market, homeowners are continuing to make their mortgage payments.

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 labor market cools, homeowners with FHA loans are likely to feel the distress first.”