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On The Market

Americans Are Late on Their Mortgages: Why I’m NOT Worried About THAT Chart

Apr 3, 2025
Mortgage delinquencies are rising, but the panic may be overblown. A popular chart seems alarming, yet it reveals trends expected with rising interest rates. The housing market is becoming a buyer's paradise with increasing inventory and potential price drops. Historically, real estate remains less volatile than stocks, providing some reassurance. Strategies for homebuyers to leverage these conditions are discussed, emphasizing opportunities amidst the current economic climate.
29:53
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Quick takeaways

  • Despite an uptick in mortgage delinquencies, overall rates remain historically low and much better than during the 2008 crisis.
  • The differing behaviors of commercial and residential mortgage delinquencies highlight a misunderstanding that does not point to a housing market crash.

Deep dives

Current State of Mortgage Delinquencies

Mortgage delinquencies among American homeowners have recently shown an uptick, but overall rates remain significantly lower than historical levels. Following the Great Financial Crisis of 2008, delinquency rates peaked and have since normalized, stabilizing around approximately 3.5% since the end of various pandemic-related forbearance programs. In the current housing market, serious delinquencies for conventional mortgages, such as those insured by Freddie Mac and Fannie Mae, are at about 0.6%, a stark contrast to the rates during the 2008 crisis which reached 8-10 times higher. This suggests that, despite surface-level concerns driven by recent trends, the overall financial health of homeowners remains strong and resistant to drastic downturns like those experienced in the past.

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