MBA: Mortgage Delinquencies Increased Slightly in Q4 2024
From the MBA: Mortgage Delinquencies Increase in the Fourth Quarter of 2024
The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.98 percent of all loans outstanding at the end of the fourth quarter of 2024, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
The delinquency rate was up 6 basis points from the third quarter of 2024 and up 10 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the fourth quarter rose by 1 basis point to 0.15 percent.
“Although mortgage delinquencies rose only ten basis points in the fourth quarter of 2024 compared to one year ago, the composition of the delinquencies changed,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Conventional delinquencies remain near historical lows, but FHA and VA delinquencies are increasing at a faster pace. By the end of the fourth quarter, the spread between the FHA and conventional delinquency rates reached 841 basis points, while the VA and conventional spread was 208 basis points.”
Added Walsh, “Government loans are also rolling to later stages of delinquency. Compared to one year ago, the seriously delinquent rate rose seventy basis points for FHA loans and fifty-seven basis points for VA loans, but only two basis points for conventional loans.”
emphasis added
The following graph shows the percent of loans delinquent by days past due. Overall delinquencies increased in Q4. The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent but not reported to the credit bureaus).
The percent of loans in the foreclosure process decreased year-over-year from 0.47 percent in Q4 2023 to 0.45 percent in Q4 2024 (red) and remains historically low.
Key findings of MBA's Fourth Quarter of 2024 National Delinquency Survey:
Compared to last quarter, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. By stage, the 30-day delinquency rate decreased 9 basis points to 2.03 percent, the 60-day delinquency rate increased 3 basis points to 0.76 percent, and the 90-day delinquency bucket increased 11 basis points to 1.19 percent.
By loan type, the total delinquency rate for conventional loans decreased by 1 basis point to 2.62 percent over the previous quarter. The FHA delinquency rate increased 57 basis points to 11.03 percent, and the VA delinquency rate increased 12 basis points to 4.70 percent.
On a year-over-year basis, total mortgage delinquencies increased for all loans outstanding. The delinquency rate increased 1 basis point for conventional loans, increased 22 basis points for FHA loans and increased 63 basis points for VA loans from the previous year.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 0.45 percent, remaining unchanged from the third quarter of 2024 and 2 basis points lower than one year ago.
The non-seasonally adjusted seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 1.68 percent. It increased 13 basis points from last quarter and increased 16 basis points from last year. The seriously delinquent rate increased 5 basis points for conventional loans, increased 49 basis points for FHA loans, and increased 32 basis points for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate increased 2 basis points for conventional loans, increased 70 basis points for FHA loans and increased 57 basis points for VA loans.
The five states with the largest quarterly increases in their overall delinquency rate were: Florida (99 basis points), South Carolina (59 basis points), North Carolina (40 basis points), Georgia (39 basis points), and Louisiana (32 basis points).
The primary concern is the increase in FHA and VA delinquency rates. Some of the increase is probably due to the hurricanes last year.
We will likely see an increase in 30-day delinquencies in Q1 2025 due to the wildfires in California.