On The Market 2025 Mortgage Delinquencies Tick Up: Will Housing Bounce Back OR Break Down?
Feb 24, 2025
In this discussion, Andy Walden, Vice President of Research and Analysis at Intercontinental Exchange, shares his expertise on the evolving mortgage landscape. He reveals alarming trends in increasing mortgage delinquencies, particularly affecting low to moderate-income borrowers, while maintaining that overall foreclosure rates remain stable. Andy also delves into the fallout from California's wildfires, which may drive up insurance costs. However, there's good news for potential homebuyers, as he forecasts a hopeful drop in mortgage rates and an increase in housing inventory!
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Rising Delinquencies
- Mortgage delinquencies are gradually rising, especially among FHA loan borrowers.
- These borrowers represent a small but growing pressure point in the market.
Delinquency Rate Increase
- Delinquency rates on FHA loans have increased by 0.75% compared to last year but are nowhere near 2019 levels.
- This increase warrants attention, though it's not currently a crisis.
Low Foreclosure Activity
- Foreclosure activity remains low despite rising delinquencies due to improved loss mitigation strategies and high homeowner equity.
- Forbearance plans and the option to sell and recoup equity reduce the need for foreclosures.
