As mortgage rates increased slightly in the fourth quarter, there was a delinquency rate of 3.88% of all loans outstanding at the end of the fourth quarter of 2023. This was up from the previous quarter of 3.62%, but slightly below the rate of 3.96% for 2022, according to the Mortgage Brokers Association.
Even though mortgage delinquencies increased, they were below the historic average for a seasonally adjusted rate from 1979-2023, which is 5.25%.
Contributing to the higher delinquency rate was the resumption of student loan payments. High personal spending also factored in, as well as high credit card balances.
According to the Mortgage Bankers Association, delinquency rates increased across the board. The 30-day-delinquent delinquency rate increased by 7 basis points between the third and fourth quarters to 2.10%.
The delinquency rate for conventional home loans hit 2.61%, which is up from 2.5% for the third quarter of 2023. The Federal Housing Administration recorded a delinquency rate higher than the other rates reported by the Mortgage Bankers Association to 10.81% from 9.5%. This represents a high level since 2021.
Homes reported to be in the foreclosure process decreased to 0.47%, which is down 2 basis points from the third quarter and down 10 basis point from the fourth quarter of 2022. This represents the lowest foreclosure inventory rate since the fourth quarter of 2021.
The states reporting the largest quarterly increases in overall mortgage delinquency rates include Louisiana, West Virginia, Illinois, Texas and New Mexico.