The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.56% of all loans outstanding at the end of the first quarter of 2023, the lowest first-quarter level ever, the Mortgage Bankers Association (MBA) said Thursday.
The MBA’s National Delinquency Survey found the delinquency rate fell 40 basis points from the fourth quarter of 2022 and was down 55 basis points from one year earlier. The percentage of loans on which foreclosure actions were started in the first quarter rose by 2 basis points to 0.16%.
“The mortgage delinquency rate fell to its lowest level for any first quarter since MBA’s survey began in 1979 and was the second lowest quarterly rate overall, just 11 basis points above the survey low in the third quarter of 2022,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “Mortgage delinquencies and the unemployment rate continue to track each other closely, with the unemployment rate in April falling back to the 54-year low of 3.4% set in January.”
Walsh said the performance of existing mortgages is exceeding expectations, but is consistent with the resilient job market.
“Across all states, there was an improvement in the first quarter compared to one year ago,” she said. “Year-over-year delinquencies for all product types — FHA, VA, and conventional — were also down.”
MBA's forecast calls for an economic slowdown and an increase in unemployment later this year and into next year. Looking forward, Walsh noted that the end of COVID-19 forbearance programs means some distressed borrowers may be offered different forbearance and loss mitigation options than those given during the pandemic.
Survey Highlights:
- Compared to last quarter, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding. By stage, the 30-day delinquency rate decreased 15 basis points to 1.77%, the 60-day delinquency rate decreased 11 basis points to 0.55%, and the 90-day delinquency bucket decreased 14 basis points to 1.24%.
- By loan type, the total delinquency rate for conventional loans decreased 34 basis points to 2.44% over the previous quarter. The FHA delinquency rate decreased 134 basis points to 9.27%, and the VA delinquency rate decreased by 18 basis points to 3.98% over the previous quarter.
- On a year-over-year basis, total mortgage delinquencies decreased for all loans outstanding. The delinquency rate decreased by 59 basis points for conventional loans, decreased 31 basis points for FHA loans, and decreased 88 basis points for VA loans from the previous year.
- The delinquency rate includes loans that are at least one payment past due, but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 0.57%, unchanged from the fourth quarter of 2022 and 4 basis points higher than one year ago.
- The non-seasonally adjusted seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 1.73%. It decreased by 16 basis points from last quarter and decreased by 66 basis points from last year. The seriously delinquent rate decreased 11 basis points for conventional loans, decreased 39 basis points for FHA loans, and decreased 17 basis points for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate decreased by 53 basis points for conventional loans, decreased 132 basis points for FHA loans, and decreased 89 basis points for VA loans.
- The five states with the largest quarterly decreases in their overall delinquency rate were: Arkansas (117 basis points), Louisiana (114 basis points), West Virginia (111 basis points), Indiana (103 basis points), and Oklahoma (96 basis points).
Note: For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.
