Fannie Mae Single-Family Mortgage Serious Delinquency Rate Lowest since 2002

Fannie Serious Delinquencies Declined in July, Freddie Unchanged

Freddie Mac reported that the Single-Family serious delinquency rate in July was 0.56%, unchanged from 0.56% June. Freddie's rate is down year-over-year from 0.73% in July 2022.  This is now below the pre-pandemic low of 0.60% and is at the lowest rate since before the housing bust.

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 0.54% in July from 0.55% in June. The serious delinquency rate is down year-over-year from 0.76% in July 2022.  This is below the pre-pandemic low of 0.65% and the lowest rate since 2002.

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), 1.78% are seriously delinquent (down from 1.82% in June). 

For loans made in 2005 through 2008 (1% of portfolio), 2.82% are seriously delinquent (down from 2.86%).

For recent loans, originated in 2009 through 2023 (98% of portfolio), 0.45% are seriously delinquent (unchanged from 0.45%). So, Fannie is still working through a handful of poor performing loans from the bubble years.

Since lending standards have been solid and most homeowners have substantial equity there will not be a huge wave of single-family foreclosures this cycle. This means that we will not see cascading price declines like following the housing bubble.

Note: Multi-family delinquencies are a concern, see: Forecast: Multifamily Starts will Decline Sharply