Mortgage delinquencies eased in Q2, still higher than 2025

Mortgage delinquencies for one- to four-unit residential properties declined slightly in the second quarter, but they remained elevated from a year earlier as more borrowers moved into later stages of delinquency. That’s according to the Mortgage Bankers Association (MBA)’s National Delinquency Survey released Thursday.

The seasonally adjusted mortgage delinquency rate fell to 4.37% of all loans outstanding at the end of the second quarter, down 7 basis points from the first quarter but up 44 bps from a year earlier.

The share of loans in the foreclosure process increased to 0.67%, up 3 basis points from the first quarter and 19 bps from a year earlier.

“Mortgage delinquencies decreased slightly across all loan types in the second quarter of 2026. Nonetheless, the broader trend is that both delinquencies and foreclosures have increased over the past year,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement.

The 30-day delinquency rate fell 3 bps to 2.21%, while the 60-day rate declined 5 bps to 0.73%. The 90-day delinquency rate increased 1 bps to 1.43%.

Delinquencies declined across all major loan types on a quarterly basis. The conventional delinquency rate fell 3 basis points to 2.72%, while the Federal Housing Administration (FHA) rate dropped 9 bps to 11.79%. The U.S. Department of Veterans Affairs (VA) delinquency rate declined 10 bps to 4.89%.

Despite the quarterly improvement, all three loan types posted higher delinquency rates than a year earlier. Conventional delinquencies rose 12 basis points, FHA delinquencies increased 122 bps and VA delinquencies rose 57 bps.

FHA borrowers continued to show particular signs of distress. The non-seasonally adjusted seriously delinquent rate — loans that are at least 90 days past due or in foreclosure — rose to 2.06%, up 3 basis points from the previous quarter and 49 bps from a year earlier.

The serious delinquency rate for FHA loans increased 227 basis points from a year earlier, compared with a 6-bps increase for conventional loans and a 31-bps increase for VA loans.

“Some loans are continuing to move to later stages of delinquency,” Walsh said. “The seriously delinquent rate … increased for the fourth consecutive quarter. Furthermore, FHA serious delinquencies are becoming pronounced, increasing more than 225 basis points from the previous year.”

Foreclosure starts declined 4 basis points in the second quarter to 0.2% of loans. Still, the foreclosure inventory rate was nearly 20 bps higher than a year earlier.

Walsh pointed to weakness in the labor market and rising delinquencies across other categories of consumer debt, including student loans, credit cards and auto loans, as potential signs of growing financial stress among homeowners. Stretched housing affordability and slower home equity accumulation could further exacerbate that pressure, she said.

Mortgage delinquencies were generally higher in the South, Midwest and Northeast than in the West. The states with the largest quarterly increases in overall delinquency rates were Maine, Michigan, Mississippi, Kansas, West Virginia, Kentucky and South Carolina.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.