What Mortgage Delinquencies Tell Us About the Future of Foreclosures
Lately, headlines have been buzzing about rising foreclosures and if you’re a homeowner, buyer, or investor, that can feel unsettling. Are we heading for another 2008-style housing crash?
The short answer: No.
Here’s the bigger picture you need to know.
Looking Back vs. Today’s Reality
During the housing crash of 2007–2011, over 9 million Americans went through some form of distressed sale. Compare that to last year: just over 300,000.
Even though foreclosures have ticked up recently, the scale is nowhere near what we experienced in the past. And when we look at today’s delinquency data (loans that are more than 30 days past due), the numbers are stable overall.
The Key Indicator Experts Watch
Industry experts use mortgage delinquencies as an early warning sign of foreclosures to come. Right now, delinquency rates as a whole are holding steady compared to the end of last year. That’s reassuring.
But there is one segment standing out. As Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association, notes:
“While overall mortgage delinquencies are relatively flat compared to last year, the composition has changed.”
Right now, borrowers with FHA mortgages make up the biggest share of new delinquencies (see graph below):
Photo Credits to Keeping Current Matters
Why FHA loans? Typically, FHA borrowers are more sensitive to economic pressures like inflation, employment shifts, and affordability challenges. Still, this does not mean the market is in danger of a crash.
The graph shows that while FHA delinquencies have risen, other loan types remain low and stable. Back in 2008, delinquency rates were high across the board. Today, that’s simply not the case.
As ResiClub explains:
“The recent uptick in mortgage delinquency seems to be concentrated among FHA borrowers, however, mortgage performance remains very solid when viewed in light of the twenty-year history of our data.”
Where FHA Loans Are Most Common
Here’s another important factor: FHA loans only make up about 12% of all mortgages nationwide.
Still, local differences matter. FHA loans are far more common in certain regions, especially in the South.
The map below does not show delinquencies, it simply shows the concentration of FHA loans by state, so you can see which areas carry the most exposure (see map below):
Photo Credits Keeping Current Matters
As the Federal Reserve Bank of New York highlights:
“Looking at geographic concentrations of loans, recent data indicate that a higher proportion of mortgage balances are delinquent in many of the southern states . . . we see that higher delinquency rates coincide with a higher share of FHA loans across states.”
Even so, today’s delinquency rates remain well below crisis-era levels.
If You’re Struggling with Payments
Nobody wants to face foreclosure. If you’re experiencing financial hardship, know this: you have options.
- Contact your mortgage provider, many offer repayment plans or modifications.
- Explore your equity, with near-record homeowner equity today, many people can sell their home to avoid foreclosure entirely.
In other words, foreclosure isn’t the only path forward.
Bottom Line
Foreclosures are rising slightly, but this is not a repeat of 2008. Overall delinquency trends remain stable, and while FHA borrowers are seeing more challenges, the broader housing market is on solid ground.
📌 Stay informed, stay prepared, and if you’d like to understand what this means for your own real estate or investment goals, I’m here to help. I can also connect you with a reliable mortgage provider to discuss your financing options and make sure you’re in the best position moving forward.
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