The last quarter of 2023 saw a noticeable uptick in mortgage delinquencies, signaling a shift in the housing finance landscape, as revealed in the Mortgage Bankers Association’s (MBA) latest findings.
The rate of delinquencies for loans on one-to-four-unit residential properties rose to 3.88% of all loans outstanding, showing a modest increase from the third quarter yet an improvement from the year prior. This rate remains low compared to the historical average of 5.25%, since 1979.
“While the overall delinquency rate is still very low compared to the historical average, the pace of new loans entering delinquency picked up and some loans moved into later stages of delinquency. The resumption of student loan payments, robust personal spending, and rising balances on credit cards and other forms of consumer debt, paired with declining savings rates, are likely behind some borrowers falling behind at the end of 2023,” said Marina Walsh, MBA’s vice president of industry analysis.