What Mortgage Delinquencies Tell Us About the Future of Foreclosures

Are Foreclosures on the Rise? Here’s What To Know

You may have seen headlines suggesting foreclosures are increasing. If that has you wondering whether another housing crash is on the horizon, here’s some helpful context.

According to ATTOM, during the housing crisis from 2007 to 2011, more than nine million homeowners went through some type of distressed sale. Last year, that number was just over 300,000.

So, while foreclosures have ticked up slightly, the numbers remain far below what we saw back then.

Experts track mortgage delinquencies, meaning loans that are over 30 days late, as an early signal for potential foreclosures. Current data shows delinquency rates are holding steady compared to the end of last year. That stability suggests the overall housing market remains healthy.

Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association, notes that while total delinquencies are fairly flat, the mix has shifted. Borrowers with FHA loans currently make up the largest share of new delinquencies.

This group may be more sensitive to changes in the economy such as inflation, job market fluctuations, or recession concerns. Still, this doesn’t indicate a broader market issue. Delinquency rates for other loan types remain low and stable, which is very different from the widespread challenges seen during the 2008 crash.

ResiClub summarizes it well:

“The recent uptick in mortgage delinquency seems to be concentrated among FHA borrowers; however, mortgage performance remains very solid when viewed in light of the twenty-year history of our data.”

Regional Patterns

FHA loans account for about 12% of all home loans nationwide, though their concentration varies by region. Southern states, for example, tend to have a higher share of FHA loans.

The Federal Reserve Bank of New York explains:

“Recent data indicate that a higher proportion of mortgage balances are delinquent in many of the southern states, where FHA loans also make up a larger share of the total.”

Even so, today’s delinquency rates remain well below those seen in 2008. This is not a sign of a housing crisis, though experts will continue to keep an eye on these trends.

If You’re Facing Financial Challenges

If you’re struggling to make your mortgage payments, there are resources and options available. Start by contacting your lender, who may be able to offer a repayment plan or loan modification.

For many homeowners, the amount of equity built up over the past few years provides another safety net. Selling could be a way to avoid foreclosure while preserving that equity.

The Bottom Line

Foreclosures are rising slightly, but the data doesn’t point toward a market crash. The overall housing sector remains on solid ground, and professionals are continuing to monitor trends closely.

If you’d like to stay informed about what’s happening in the housing market, let’s connect so you always have the latest updates.