The Mortgage Bankers Association (MBA) reported that the mortgage delinquency rate fell to its lowest level since it began tracking this metric 43 years ago, supporting claims the economy is on the cusp of a turnaround.
“Buoyed by a resilient job market, homeowners are continuing to make their mortgage payments,” Marina Walsh, the MBA’s vice president of industry analysis, said in a statement.
The seasonally-adjusted delinquency rate for one-to-four-unit residential properties stood at 3.37% in the second quarter of this year, down 27 basis points compared to the same period one year ago and 19 basis points quarter over quarter, the MBA reported. The percentage of loans on which foreclosure actions were started in the second quarter fell by 3 basis points.
Delinquencies across all mortgage types, including conventional, FHA, and VA mortgages fell during the second quarter.
Despite this encouraging news, the MBA reported some signs of consumer-related stress, with delinquencies rising for other forms of credit, including credit cards and car loans, noted Walsh.
In addition, FHA delinquencies rose 10 basis points compared to the year-earlier period, and on a non-seasonally adjusted basis, rose 13 basis points year over year and 71 basis points from the first quarter of 2023.
“As the economy slows and [the] labor market cools, homeowners with FHA loans are likely to feel the distress first,” said Walsh.
