Fannie and Freddie: Single Family and Multi-Family Serious Delinquency Rates Increased in November

Fannie Mae Multi-Family Delinquency Rate Highest Since 2011 (ex-Pandemic)

Happy New Year! Best wishes for 2025, Bill

Single-family and multi-family serious delinquencies increased in November.

Freddie Mac reported that the Single-Family serious delinquency rate in November was 0.56%, up from 0.55% October. Freddie's rate is up year-over-year from 0.54% in November 2023, however, this is below the pre-pandemic level of 0.60%.

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 rate in November was 0.53%, up from 0.52% in October. The serious delinquency rate is down year-over-year from 0.54% in November 2023. This is also below the pre-pandemic lows of 0.65%.

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), 1.44% are seriously delinquent (unchanged from 1.44% the previous month).

For loans made in 2005 through 2008 (1% of portfolio), 2.09% are seriously delinquent (down from 2.11%).

For recent loans, originated in 2009 through 2023 (98% of portfolio), 0.48% are seriously delinquent (up from 0.46%). So, Fannie is still working through a handful of poor performing loans from the bubble years.

Multi-Family Delinquencies Increased, Fannie Rate Highest Since 2011 (ex-Pandemic)

Here are the multi-family 60+ day delinquency rate since 2006.

Freddie Mac (blue) reports that the multi-family delinquencies rate increased to 0.40% in November, up from 0.40% in October, and down from the recent peak of 0.44% in January 2024.

Fannie Mae (red) reports that the multi-family delinquencies rate increased to 0.61% in November, up from 0.57% in October, and is at the highest rate since 2011 (excluding pandemic).

This shows the impact of the great recession, and the eventually recovery.

In 2010, we started discussing the turnaround for apartments - when delinquency peaked. Then, in January 2011, I attended the NMHC Apartment Strategies Conference in Palm Springs, and the atmosphere was very positive.

The multi-family rate increased recently as completions increased, household formation slowed, rent growth slowed, vacancy rates increased and borrowing costs increased sharply. Once again, I’ll try to call the turning point for multi-family delinquencies and for multi-family starts. Stay tuned!