Mortgage Delinquencies Continue To Hold Steady Despite Economic Pressures On Borrowers

The U.S. mortgage delinquency rate decreased to 2.9% in June, down from 3% in June 2024, despite the challenging economic climate, according to Cotality’s latest Loan Performance Insights Report.

However, delinquencies increased from 2.8% in the first quarter.

The District of Columbia showed the highest increase in the overall delinquency rate among all states.

Molly Boesel, senior principal economist at Cotality, says although the national delinquency rate inched up, month-over-month, it remains below December’s peak of 3.2%.

“Meanwhile serious delinquencies continue to move within a narrow band between 0.8 percent and 1 percent,” Boesel says in the report. “The share of loans transitioning from current to 30 days delinquent was relatively unchanged quarter over quarter, and we saw a notable year-over-year decline although last year’s figure was briefly elevated.”

“Overall, while delinquency rates remain historically low, regional pockets — such as the District of Columbia and select metro areas — are showing signs of upward movement, and recent increases in unemployment could put further pressure on borrowers in the months ahead,” she adds. “However, it is encouraging that delinquencies have not advanced to more severe stages.”

Early-stage delinquencies (30 to 59 days past due) represented 1.6% of all loans, down from 1.7% in June 2024.

Loans 60 to 89 days past due represented 0.4% of all loans, unchanged compared with June 2024.

Serious delinquencies (90 days or more past due, including loans in foreclosure) represented  0.9% of all loans – flat compared with June 2024.

The U.S. foreclosure rate ticked up slightly in June but continues to hover within its five-year range of 0.2% to 0.3%. This suggests that most borrowers are managing to avoid foreclosure despite financial pressures, Cotality says.

Photo: Alexander Grey