0.71% of all mortgage debt in the U.S. was seriously delinquent in the third quarter of 2024, up from 0.50% in Q3 2023. While serious delinquencies have grown recently, they're still lower than at any point from the start of 2003 to the end of 2019, just before the beginning of the COVID-19 pandemic.
By loan type over the previous quarter, the total delinquency rate for conventional loans decreased 1 basis point to 2.63 percent. The FHA delinquency rate decreased 14 basis points to 10.46 percent, and the VA delinquency rate decreased 5 basis points to 4.58 percent.
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.
By loan type, the total delinquency rate for conventional loans increased 11 basis points to 2.61 percent over the previous quarter. The FHA delinquency rate increased 131 basis points to 10.81 percent, the highest level since the third quarter of 2021.
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.
For mortgages, while there has been a moderate rise in mortgage delinquencies, they remain below pre-pandemic levels. Mortgage delinquencies rose from 1.4% during Q3 2021 to 3.2% by Q1 2024. The pre-pandemic average mortgage delinquency rate was 3.5%.
In 2022, nearly 40% of U.S. homeowners owned their homes outright, according to Census Bureau data analyzed by Bloomberg. In total, 33.3 million single-family homes and condos were mortgage-free, a 31% increase compared to 25.4 million homes a decade ago.
Similarly, states along the Pacific Coast—where home values skyrocketed during the pandemic—have some of the lowest rates of free-and-clear homeownership among the working-age population. California (22.7%), Washington (22.8%), and Oregon (22.9%) sit at 45th, 44th, and 43rd out of all 50 states, respectively.
In other words, if your monthly gross income is $10,000 or $120,000 annually, your mortgage payment should be $2,800 or less. Lenders usually require housing expenses plus long-term debt to less than or equal to 33% or 36% of monthly gross income.
“Typically, about 1% of mortgages are in foreclosure at any one point in time,” says Rick Sharga, executive vice president of market intelligence at real estate data company ATTOM, based in Irvine, California.
These states had the highest average mortgage balance per borrower as of Q3 2023, according to Experian: District of Columbia – $503,254. California – $432,456. Hawaii – $398,670.
While missing monthly payments is the most common way to default on a home loan, it's not the only way. Homeowners can also go into default if they: Fail to pay their property taxes. Fail to pay their homeowners insurance.
Delinquent mortgages are also on the rise. Although many homeowners who bought or refinanced before 2022 were able to lock in low rates, as of Q2 2024, the share of mortgages over 30 days delinquent has risen to 3.35%.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
Since then, with vaccines allowing people to work more safely and minimizing further disruption to business operations, the percentage of mortgage holders behind on payments has declined to about 7%—an improved figure, but one that still represents more than 6 million American households.
The National Foundation for Credit Counseling recommends that the debt-to-income ratio of your mortgage payment be no more than 28%.
WASHINGTON, D.C. (August 15, 2024) – The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.97 percent of all loans outstanding at the end of the second quarter of 2024, according to the Mortgage Bankers Association's (MBA) National Delinquency ...
If you miss one mortgage payment, lenders will often issue you a 15-day grace period to pay without incurring a penalty. If you miss four consecutive mortgage payments (or are 120 days late), most lenders begin the process of foreclosure on your home.
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.
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.
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-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.