US Mortgage Delinquencies Increase in the Fourth Quarter of 2025

U.S. mortgage delinquencies moved higher in Q4 2025, with the pressure concentrated in FHA and other lower‑income borrower segments rather than a broad systemic breakdown.

Headline numbers

• The seasonally adjusted delinquency rate on one‑to‑four‑unit residential mortgages rose to 4.26% of loans outstanding in Q4 2025, up 27 bps from Q3 2025 and 28 bps year‑over‑year.

• The seriously delinquent share (90+ DPD or in foreclosure) reached about 1.85%, up 24 bps from the prior quarter and 17 bps from a year earlier.​

• New foreclosure starts were roughly stable at about 0.20% in Q4, and foreclosure inventory remained near 0.53%, only modestly above 2024 levels.​

By product type

• Conventional loans: Overall delinquency rose, with the adjusted delinquency rate around 2.89%, up 27 bps from Q3 and 27 bps from a year earlier, but serious delinquencies remain relatively low and near flat year‑over‑year.​

• FHA loans: Delinquency increased sharply, with the FHA rate reported around 11.52%, the highest since the early 2010s; late‑stage (90+ DPD) FHA delinquencies climbed about 76 bps in the quarter, and the FHA serious‑delinquency rate was up roughly 100 bps year‑over‑year.

• VA loans: Delinquencies also rose, to about 4.60%, up 10 bps quarter‑over‑quarter; serious delinquencies increased 28 bps in Q4 but were roughly unchanged from a year earlier.

Stage of delinquency

• 30‑day delinquency: Decreased by about 5 bps to 2.07% in Q4, indicating fewer very‑new misses.

• 60‑day delinquency: Rose 16 bps to 0.92%.

• 90‑day‑plus (excluding foreclosure): Also increased about 16 bps to 1.27%.

This pattern—fewer new 30‑day lates but rising 60‑ and 90‑day buckets—suggests a cohort of borrowers rolling deeper into distress rather than a pure increase in first‑time slippage.

Geographic and borrower profile

• The largest quarterly increases in overall mortgage delinquency were in states like Arizona, Louisiana, Indiana, Iowa, Texas, and several Midwestern and Southern markets, with some reporting rises of roughly 80–110 bps.

• Separate New York Fed household debt data show that about 1.3% of mortgage balances became seriously delinquent over 2025, roughly similar to pre‑Great‑Recession averages, but lower‑income areas and regions with weakening labor markets are seeing “rapid” increases in mortgage delinquencies.

An illustrative example: Mississippi and Louisiana are cited with non‑current mortgage rates near 7.5% and serious delinquency around 1.9%, well above national averages.​

Macro context and drivers

• Aggregate household delinquency across all credit types reached about 4.8% of balances in some stage of delinquency by end‑2025, up from 4.5% in Q3, signaling a broader, though still gradual, deterioration in household credit.

• Analysts attribute much of the Q4 mortgage uptick to:

  • Expiration of pandemic‑era or FHA‑specific relief and loss‑mitigation programs, which had been suppressing distress among more marginal borrowers.

  • A cooling labor market and still‑elevated living costs, particularly affecting lower‑income and FHA‑heavy borrower segments.

How to read the risk signal

• The Q4 2025 move takes mortgage delinquencies off the cycle lows and confirms a multi‑quarter upward trend (from roughly 3.76% in Q3 to 4.26% in Q4), but absolute levels remain far below crisis‑era peaks and broadly consistent with late‑cycle normalization.

• Risk is skewed toward:

  • FHA and other high‑LTV, lower‑income borrowers.

  • Regions with weaker job markets or higher local financial stress.

  • Borrowers who have transitioned from early‑stage delinquency into 60‑ and 90‑day buckets.

For monitoring, the MBA National Delinquency Survey and the New York Fed Household Debt and Credit report together give a clean view of whether this Q4 2025 increase remains a controlled normalization or evolves into a more systemic mortgage‑credit event.