Residential Real Estate News
Mortgage Delinquencies in U.S. Jump 4% in Late 2022
According to the Mortgage Bankers Association's latest National Delinquency Survey, the delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.96 percent of all loans outstanding at the end of the fourth quarter of 2022.
The delinquency rate was up 51 basis points from the third quarter of 2022 but still down 69 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the fourth quarter fell by 1 basis point to 0.14 percent.
"As expected, the overall national mortgage delinquency rate increased in the fourth quarter of 2022 from its previous quarterly survey low," said Marina Walsh, CMB, MBA's Vice President of Industry Analysis. "The weaker economy and ongoing inflationary pressures contributed to the uptick in delinquencies. The delinquency rate - while still low - increased from the previous quarter across all loan types and across all stages of delinquency."
According to Walsh, for the past 15 years, mortgage delinquencies have tracked very closely with employment conditions. Despite recent indicators of resiliency in the job market, including the unemployment rate declining to 3.4 percent in January, MBA still forecasts for slower hiring and rising unemployment, with the rate rising to 5.2 percent by the end of the year. This will likely mean further increases in mortgage delinquencies.
Added Walsh, "Notwithstanding the fourth-quarter increase in mortgage delinquencies, the foreclosure starts rate of 0.14 percent was well below the historical quarterly average of 0.40 percent. Many distressed homeowners have loss mitigation options available to them and have accumulated home equity, which can ease financial hardship and avert foreclosure actions."
