However, challenges remain for many borrowers
Mortgage delinquency rates in the second quarter of 2023 fell to 3.37% – their lowest level in 44 years.
The Mortgage Bankers Association (MBA) reported Thursday that total delinquency rate for mortgage loans on one-to-four-unit residential properties declined 19 basis points month over month and 27 basis points year over year in Q2.
Of the overall figure, the share of loans on which foreclosure actions were started dropped by three basis points to 0.13% in the second quarter.
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"The seasonally-adjusted mortgage delinquency rate fell to its lowest level since MBA's survey began in 1979, reaching 3.37% in the second quarter of 2023," said Marina Walsh, MBA's vice president of industry analysis. "Buoyed by a resilient job market, homeowners are continuing to make their mortgage payments."
All mortgage types saw declines in delinquency rates. Conventional loan delinquencies decreased 15 basis points to 2.29%, the lowest level in the survey's history dating back to 2004.
VA delinquency rate also plunged to a four-year low, down 28 basis points to 3.70%, while the FHA delinquency rate plummeted 32 basis points to 8.95% over the quarter.
"Despite low delinquency rates, there are early signs of possible consumer credit stress," Walsh noted in MBA's report. "Delinquencies are rising for other forms of credit such as credit cards and car loans. In addition, FHA delinquencies rose 10 basis points compared to year-ago levels. On a non-seasonally adjusted basis, FHA delinquencies rose 13 basis points year-over-year and 71 basis points from the first quarter of 2023. As the economy slows and labor market cools, homeowners with FHA loans are likely to feel the distress first."
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