By Ginika Igboke
Mortgage delinquency rates for one- to four-unit residential properties increased in the fourth quarter of 2025 on both a quarterly and annual basis, according to a Feb. 12 statement from the Mortgage Bankers Association (MBA).
The seasonally adjusted delinquency rate rose to 4.26 percent of all outstanding loans, up 27 basis points from the third quarter and 28 basis points higher than a year earlier.
Mississippi recorded the largest quarterly increase in delinquency rates, followed by Louisiana, Maryland, Oklahoma, and Indiana.
Marina Walsh, MBA’s vice president of industry analysis, said delinquencies increased across all major loan categories in the final three months of the year, including conventional loans, Federal Housing Administration (FHA) loans, and Department of Veterans Affairs loans.
“The most pronounced uptick was with FHA loans, which reached a delinquency rate of 11.52 percent, the highest level since the second quarter of 2021,” Walsh said.
She noted that while early-stage FHA delinquencies remained relatively stable, loans 90 days or more past due rose by 76 basis points. The FHA foreclosure inventory rate also climbed to its highest level since early 2020.
Walsh suggested that weakening labor market conditions may be contributing to the increase in missed payments.
In a Feb. 10 post on Liberty Street Economics, economists at the Federal Reserve Bank of New York found a correlation between rising unemployment and mortgage delinquency rates. Counties experiencing the sharpest increases in unemployment saw mortgage delinquency rates worsen by nearly 0.6 percentage points over the past year, while areas with stable or declining unemployment recorded more modest increases of about 0.2 percentage points.
Data from the Bureau of Labor Statistics show that the national unemployment rate has trended upward since reaching a low of 3.4 percent in April 2023, increasing by nearly one percentage point as of January. Although unemployment has remained at or above 4 percent in recent months, it declined from 4.5 percent in November to 4.3 percent in January.
Foreclosure Filings Increase Annually
Foreclosure activity is also rising year over year. In January, 40,534 U.S. properties recorded foreclosure filings, according to a Feb. 12 report from real estate analytics firm ATTOM.
Although January filings were down 10 percent from December, they were 32 percent higher than in January 2025, marking the 11th consecutive month of annual increases. Delaware, Nevada, Florida, South Carolina, and Maryland posted the highest foreclosure rates.
Administration Efforts and Housing Trends
The administration of President Donald Trump has introduced measures aimed at reducing homeowners’ financial strain. In a post on Truth Social last month, Trump directed the purchase of $200 billion in mortgage-backed securities, a move expected to help lower mortgage rates and monthly payments.
Additional proposals include extending mortgage terms to 50 years, opening federal lands for housing development, eliminating capital gains taxes on home sales, and issuing a national housing emergency declaration to accelerate construction.
Housing affordability has shown modest improvement. According to brokerage firm Redfin, the income required to purchase a typical home has declined 4 percent from a year earlier.
Meanwhile, data from Freddie Mac indicate that the average rate for a 30-year fixed mortgage has fallen from 6.87 percent a year ago to 6.09 percent as of Feb. 12.
Original article
Comments