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!

35:27

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Andy Walden

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Quick takeaways

The rise in mortgage delinquencies, particularly among FHA loan borrowers with lower credit scores, signals potential distress in a specific market segment.

California's devastating wildfires are likely to affect insurance costs statewide, impacting home affordability and market dynamics across high-risk areas.

Deep dives

Rising Delinquencies and Market Stability

The podcast discusses the gradual increase in delinquencies among FHA loans, particularly affecting borrowers with lower credit scores and down payments. While the overall strength of the housing market remains intact, with average credit scores near all-time highs and historically low delinquency rates, certain segments, especially those financed through FHA loans, are beginning to show signs of stress. Notably, delinquency rates have risen by approximately 0.75% compared to the previous year, a trend that warrants attention as it represents a shift in the market dynamics. Despite these increases, the current rates are still far from the levels seen during the housing crisis of the late 2000s, indicating that while caution is advised, a massive crash is not imminent.

Intro

2min

Rising Mortgage Delinquencies: A Sector Review

11min

Mortgage Delinquencies and Market Resilience

5min

Insurance Dynamics Amid Wildfires

8min

Exploring Investment Strategies in a Changing Housing Market

3min

Housing Market Outlook 2025

6min

ICE’s February 2025 Mortgage Monitor report is out, revealing new data that may signal a “shift” in the housing market. Could these changes lead housing to bounce back or break down? One worrying metric is beginning to rise, but could it cause a downward spiral for the rest of the housing market? We’re uncovering it all on this episode with ICE’s Andy Walden.

From mortgage delinquencies to interest rate fluctuations, insurance overhauls, and more buyer power, the housing market is changing quickly. We’ll first talk about why a specific subset of homeowners is becoming increasingly delinquent on their mortgage payments. This group makes up a significant portion of the market, but could this uptick trigger a rise in foreclosures?

California’s wildfires became one of the costliest natural disasters in history, and with insurance providers already struggling, you may begin to feel the fiery effects on your next insurance bill regardless of where you live. Finally, some great news for buyers as Andy shares his optimistic forecast for mortgage rates and housing inventory, making it easier for you to buy your next property.

In This Episode We Cover

The worrying housing market metric that could signal distress among homeowners

Whether California’s wildfires could cause your insurance rates to jump

Foreclosure activity and why it isn’t vastly increasing as unemployment rises and inflation melts away spending power

Andy’s 2025 mortgage rate forecast and when rates could fall this year

Why homebuyers could have even better choices come this spring homebuying season

And So Much More!

Links from the Show

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Over 6 Million Americans Are Late on Their Mortgage Payments—Here’s What It Means for Investors