Delinquencies rose in November but remain historically low despite some worrying data about FHA and VA loans.
That’s according to ICE’s First Look at November Mortgage Performance, which clocked delinquencies at 3.39% last month. This is down 10 bps YOY and remains 64 bps below pre-pandemic levels.
Serious delinquencies– loans with missed payments more than 90 days late– increased to 459,000 but are 21% lower than the same time last year.
But while loans remain strong overall, FHA delinquencies hit a 9-year high (excluding the immediate aftermath of the pandemic). Early-stage delinquencies for VA loans also surged, reaching their highest non-pandemic levels since 2009.
Recently originated mortgages are suffering the most thanks to the high interest rates of late 2023. ICE says it will continue to watch government loan performance in 2024.
Notably, GSE mortgages are doing fine. Their overall delinquency rates are less than half the national average and early-stage delinquencies have seen little change.
High equity continues to shield homeowners from foreclosure. Foreclosure starts fell, down 12.2%, and active foreclosure inventory slipped to 216,000, 24% below 2019’s levels.
The Mortgage Bankers Association also reported positive performances in this area, which it attributes to the strength of servicing portfolios and the labor market.
2024 could usher in worse outcomes, however, as homeowners continue to face economic uncertainty. Economists expect a minor recession in 2024, possibly paired with a labor market downturn.
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