US Mortgage Delinquency Rate Increases in Q3

The Mortgage Bankers Association (MBA) on Thursday (11-9-23) released its National Delinquency Survey for Q3. According to the survey, the delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.62% of all loans outstanding at the end of Q3.

The delinquency rate was up 25 basis points from Q2 and up 17 basis points from 2022Q3. The percentage of loans for which foreclosure actions were started in Q3 increased by only 1 basis point to 0.14%.

Compared to Q2, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. The breakdown by term is as follows:

• The 30-day delinquency rate increased 28 basis points to 20.3%.
• The 60-day delinquency rate increased 7 basis points to 0.62%.
• The 90-day delinquency rate decreased 9 basis points to 0.98%.

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

“The national mortgage delinquency rate increased in the third quarter from the record survey low reached in the second quarter of this year, with an uptick in delinquencies across all loan types—conventional, FHA, and VA. The increase was driven entirely by a rise in earliest-stage delinquencies—those 30-days and 60-days past due. Later-stage delinquencies—those 90 days or more past due—declined to the lowest level since the first quarter of 2020.

The decline in later-stage delinquencies, along with a foreclosure starts rate of 0.14%—which is well below the historical quarterly average of 0.40%—suggest that distressed homeowners may be utilizing available loss mitigation options that prevent a foreclosure start. Additionally, accumulated home equity may also be enabling some homeowners to sell their homes well before foreclosure becomes a possibility.”