The number of mortgages seriously past due or in foreclosure reached the highest level since 2022, a sign that more homeowners are facing prolonged financial stress.
As of January, some 878,000 home loans were more than 90 days past due or in foreclosure, according to ICE Mortgage Technology, a figure that’s risen 25% in the last four months. Much of the increase comes from FHA loans, which are most often used by homebuyers with moderate credit scores and limited down payment savings.
The uptick in seriously past-due loans doesn’t necessarily mean that more homeowners are defaulting. The number of new loans that have turned seriously delinquent in recent months has been relatively flat, according to the report. Rather, more homeowners in arrears are staying there by failing to “cure” their delinquencies through steps such as catching up on payments, modifying their loans, or reaching a forbearance agreement with their lenders.
“These dynamics bear watching in the coming months, as default activity continues to trend off recent record lows,” Andy Walden, head of mortgage and housing market research at ICE, said in a statement.
The ICE data is the latest sign that mortgage stress is growing for a subset of Americans. Data released this week by credit scoring company VantageScore showed that mortgage delinquency rates jumped across all stages in February compared to a year ago, led by an 18% rise in the rate of seriously delinquent borrowers, to 0.2%.
“The broad-based increase across delinquency stages may reflect continued affordability pressures for homeowners, as elevated mortgage rates, rising insurance and broader household budget strain weigh on borrower repayment capacity,” the VantageScore report said.
While mortgage delinquencies are on the rise, they remain far lower than during the financial crisis, which at its peak saw over 8% of borrowers land in seriously delinquent status. In many cases, past-due numbers are rising off of pandemic-era lows.
Mortgage delinquency rates also remain lower than past-due rates on other types of debt, like auto loans and credit cards. As of February, those had serious delinquency rates of 0.32% and 0.28%, respectively, according to VantageScore data.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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