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Fannie and Freddie Serious Delinquencies in May: Single Family Declined, Multi-Family Increased
Single-family serious delinquencies continued to decline in May, however, multi-family serious delinquencies are now increasing.
Freddie Mac reported that the Single-Family serious delinquency rate in May was 0.58%, down from 0.61% April. Freddie's rate is down year-over-year from 0.80% in May 2022. This is below the pre-pandemic lows. Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.
Fannie Mae reported that the Single-Family Serious Delinquency decreased to 0.56% in May from 0.58% in April. The serious delinquency rate is down from 0.87% in May 2022. This is below the pre-pandemic lows. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.
These are mortgage loans that are "three monthly payments or more past due or in foreclosure". Mortgages in forbearance are being counted as delinquent in this monthly report but are not reported to the credit bureaus.
For Fannie, by vintage, for loans made in 2004 or earlier (1% of portfolio), 1.85% are seriously delinquent (down from 1.92% in April).
For loans made in 2005 through 2008 (1% of portfolio), 2.95% are seriously delinquent (down from 3.07%).
For recent loans, originated in 2009 through 2023 (98% of portfolio), 0.46% are seriously delinquent (down from 0.48%). So, Fannie is still working through a handful of poor performing loans from the bubble years.
Multi-Family Delinquencies Increased
Freddie Mac reports that multi-family delinquencies increased to 0.20% in May, up from 0.07% in May 2022.
This graph shows the Freddie multi-family serious delinquency rate since 2012. Rates were still high in 2012 following the housing bust and financial crisis.
The multi-family rate increased following the pandemic and has increased recently as rent growth has slowed, vacancy rates have increased, and interest rates have increased sharply. This will be something to watch as rents soften.
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