Ties to unemployment
And TransUnion highlighted a 60-day delinquency rate of 1.22% in Q3 2024, a 27 basis-point (bps) increase from the same time last year. Rather than the current level, the upward trend in mortgage delinquencies is the primary cause for concern.
The Trepp CMBS Delinquency Rate rose once more in December 2024, with the overall rate increasing 17 basis points to 6.57%. The office delinquency rate rose 63 basis points in December to 11.01%, surpassing the 11% mark for the first time since Trepp began tracking delinquency rates in 2000.
Federal Housing Administration (FHA) loans had the highest delinquency rate in the United States in 2024. As of the second quarter of the year, 10.6 percent of one-to-four family housing mortgage loans were 30 days or more delinquent.
WASHINGTON, D.C. (November 7, 2024) — The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased slightly to a seasonally adjusted rate of 3.92 percent of all loans outstanding at the end of the third quarter of 2024 compared to one year ago, according to the Mortgage Bankers ...
Fitch Ratings-New York-24 July 2024: Fitch Ratings has revised its U.S. leveraged loan default rate estimate for 2024 to 5.0%-5.5%, up from 3.5%-4.0%. Cash flow pressures from slowing GDP growth and high interest rates are posing challenges to highly levered issuers' liquidity positions and ability to service debt.
In March 2024, 2.8% of mortgages were delinquent by at least 30 days or more including those in foreclosure. This represents a 0.2 percentage point change in the overall delinquency rate compared with March 2023.
While mortgage delinquency rates are on the rise nationally, the concentration of delinquent mortgages varies significantly by location. In general, delinquency rates tend to be highest in areas with higher levels of unemployment and poverty, lower levels of income, and lower property values.
If you're currently in the market looking to buy a triplex or fourplex with FHA financing, you need to see if the property's rents pass the Self-Sufficiency Test. To be “self-sufficient” means that 75% of the property's rents need to cover the monthly payments.
With FHA loans, you also have to pay an upfront mortgage insurance fee. This can be financed, but it will cause your mortgage insurance payments to be more expensive than with a conventional mortgage. Inspection standards: To qualify as an FHA-eligible property, a home must go through a property standards inspection.
Debt outpaced economic growth.
Debt held by the public (DHBP), the metric economists generally regard as the most meaningful measurement of debt, reached $29 trillion in 2024. That is $2 trillion more than at the end of 2023 and represents 99 percent of GDP (up from 97 percent in 2023).
The number of Americans falling behind on their mortgage payments has risen in recent months, nearly climbing to rates last seen before the COVID-19 pandemic. Netspend analyzed data from the Federal Reserve Bank of New York to show the uptick in homeowners falling behind on their mortgage payments since 2021.
The National Association of Home Builders expects the 30-year mortgage rate to decrease to around 6.5% by the end of 2024 and fall below 6% by the end of 2025, according to the group's latest outlook.
Despite this growth, borrower-level 60+DPD delinquency saw YoY declines for the second consecutive year, down 25 bps to 3.5% in Q3 2024. This change was driven by a mix shift and improvement in subprime delinquencies, which fell to 11.9% from 12.9% a year ago, while super prime delinquency ticked up.
Our estimate of the average interest rate lock-in effect for conventional mortgage borrowers was up from $42,000 in October to $47,800 in November 2024. House price growth may continue to moderate given increased supply and declining but still high mortgage rates.
During FY 2020, FHA endorsed more than 1.3 million home mortgage loans through its forward mortgage program, including 817,847 mortgage loans to homebuyers, 83.1 percent of whom were first-time buyers.
FHA-specifics
If you can show proof that you have now been employed for at least a six-month period before requesting a FHA loan, AND that before any employment gap you worked for two-years straight or longer, you have the potential to get approved.
Exceptions to the Rule: When You Can Have Multiple FHA Loans
The FHA recognizes that life circumstances can necessitate having more than one FHA loan. To be eligible for a second FHA loan, you must have at least 25% equity in your home or have paid down the FHA loan balance to 75% in certain circumstances.
FHA Loan Down Payments
The minimum down payment you're required to make on an FHA loan is directly linked to your credit score. Your credit score is a number ranging from 300 – 850 that's used to indicate your creditworthiness. An FHA loan requires a minimum 3.5% down payment for credit scores of 580 and higher.
Key Takeaways. We expect the U.S. leveraged loan default rate to fall to 1% by September 2025, from 1.26% in September 2024.
Delinquency Rate: As of September 30, 2024, FHA's serious delinquency rate – those mortgages where the borrower is 90 or more days behind on their mortgage payment – remained consistent with pre-pandemic levels at 4.15 percent.
“Overall mortgage delinquencies increased slightly in the first quarter of 2024, but not across all three of the major loan types. Delinquencies declined for FHA loans, were relatively flat for conventional loans, and increased for VA loans,” said Marina Walsh, CMB, MBA's Vice President of Industry Analysis.
CoreLogic: US Overall Delinquency Rate Continues to Trend Upward in 2024. The share of loans 30 or more days past due in September increased year over year.
The Trepp CMBS Delinquency soared in November 2024, with the overall delinquency rate increasing 42 basis points to 6.40%.
On Dec. 18, the Federal Reserve made its third consecutive cut of 2024, reducing the federal funds rate by 0.25 percentage points.