US Mortgage Delinquencies Are Rising

US mortgage delinquencies are clearly ticking up from their post‑pandemic lows, but levels are still closer to “late‑cycle normal” than crisis territory.

Where delinquency rates are now

• MBA’s National Delinquency Survey shows total mortgage delinquencies rose to about 4.0% in Q3 2025 and 4.26% in Q4 2025, up modestly from earlier in the year and year‑ago levels.

• ICE’s November 2025 data put the national delinquency rate at 3.85%, the highest in over four years, with 2.3 million past‑due mortgages and a large one‑month inflow of new delinquents (609k).​

• Fed data on mortgages held by commercial banks show delinquency at 1.78% in Q1–Q3 2025, still low by historical standards, reflecting banks’ generally stronger credit boxes versus FHA/other channels.​

Serious delinquencies and stress pockets

• The New York Fed estimates about 1.3% of mortgage balances became seriously delinquent during 2025, roughly in line with pre‑Great Recession averages, but trending higher from 2024.

• VantageScore reports late‑stage (90+ DPD) mortgage delinquencies rose 18.6% year over year in December 2025, albeit from a very low base (~0.20% of mortgages vs just under 0.17% a year earlier).

• The NY Fed flags rapid increases in lower‑income areas and in regions with deteriorating labor or housing markets, while higher‑income borrowers remain comparatively resilient.

Segment and product differences

• FHA performance is notably weaker: MBA reports FHA seriously delinquent rates up nearly 50 bps year over year by Q3 2025, while conventional and VA serious delinquency remain relatively flat.

• MBA’s Q4 2025 detail shows overall delinquency at 4.26%, but FHA loans at about 11.5%, underscoring concentration of stress in more leveraged, lower‑FICO borrower segments.​

• Transitions into delinquency and into 90+ DPD have picked up, with ICE noting sharp increases in rolls from current to 30‑day, 30‑ to 60‑day, and 60‑ to 90‑day delinquency bands in late 2025.

Drivers of the recent rise

• Affordability strain is central: high home prices combined with elevated mortgage rates have left some existing borrowers squeezed by broader cost‑of‑living pressures even if their mortgage rate is fixed.

• The NY Fed highlights weakening labor markets in specific regions and among lower‑income households as a key driver; any uptick in unemployment materially raises delinquency risk in these pockets.

• Overall consumer credit health is deteriorating at the margin: KPMG notes delinquencies of any duration across all debt rose to 4.8% of balances in Q4 2025, the highest since 2017, with low‑income borrowers most affected.​

How this compares to past cycles

• Serious mortgage delinquency flows (around 1.3–1.4% of mortgages entering serious delinquency in 2025) look similar to averages seen before the Great Recession, not like 2008–2010 crisis levels.

• Foreclosure starts remain low: MBA reports foreclosure start rates of around 0.20% in Q3 2025 and a foreclosure inventory of about 0.50%, only slightly above 2024 and still historically subdued.​

• An illustrative takeaway: we are moving off the unusually benign, stimulus‑supported post‑COVID floor into a more typical late‑cycle credit environment, with the pain concentrated in FHA/low‑income segments rather than broad‑based distress.

States with the highest mortgage delinquency rates right now are concentrated in parts of the South and Midwest, with several above 6% of loans past due.​

Highest delinquency levels (latest ICE “First Look”)

ICE’s November 2025 snapshot (all loans 30+ DPD, not in foreclosure) lists these as among the highest‑delinquency states:​

The broader ICE state table (not fully reproduced in the public snippet) also shows several other Southern/Midwestern states clustered near or above 5.5%, including parts of the Deep South that typically run above the national average.​

Where delinquencies are rising fastest

MBA’s state detail focuses on changes in delinquency rather than absolute levels:

• Q1 2025: biggest year‑over‑year jumps in overall delinquency were in Florida, South Carolina, Georgia, Delaware, and Wyoming.​

• Q3 2025: largest quarterly increases were in Arizona, Louisiana, Indiana, Iowa, and Texas.​

• A Q4 2025 MBA breakdown (referenced in secondary summaries) points to strong quarterly increases in Mississippi, Louisiana, Maryland, Oklahoma, and Indiana, again highlighting Southern and some Midwestern states.​

Geographic pattern

New York Fed analysis emphasizes that the deterioration is concentrated in lower‑income areas and in regions with softening local economies and home prices, even when state‑level averages still look moderate.