Serious mortgage delinquencies are on the rise as homeowner stress spreads

Core Insights - The number of mortgages seriously past due or in foreclosure has reached the highest level since 2022, indicating increased financial stress among homeowners [1] - As of January, approximately 878,000 home loans were more than 90 days past due or in foreclosure, marking a 25% increase over the last four months, primarily driven by FHA loans [1] - The rise in seriously past-due loans does not necessarily indicate an increase in defaults, as the number of new loans turning seriously delinquent has remained relatively flat [2] - More homeowners are remaining in arrears without taking steps to resolve their delinquencies, such as catching up on payments or modifying loans [2] - The increase in mortgage delinquency rates reflects ongoing affordability pressures due to elevated mortgage rates and rising household expenses [5] Industry Trends - The ICE data suggests that mortgage stress is growing for a subset of Americans, with VantageScore reporting an 18% rise in the rate of seriously delinquent borrowers to 0.2% in February compared to the previous year [4] - Despite the rise in mortgage delinquencies, current rates remain significantly lower than during the financial crisis, which saw over 8% of borrowers in seriously delinquent status [6] - Mortgage delinquency rates are also lower than those for other types of debt, such as auto loans and credit cards, which had serious delinquency rates of 0.32% and 0.28%, respectively, as of February [6]