The national mortgage delinquency rate climbed to 3.72% in December 2024, reaching its highest point in nearly three years, according to Intercontinental Exchange (ICE). While this marks a slight increase compared to previous years, foreclosure starts and completed sales have actually declined.
At ReadySetLoan, we understand that financial challenges can arise unexpectedly, and we’re here to guide homeowners through market fluctuations. Let’s explore what these trends mean for borrowers and what steps you can take if you’re concerned about mortgage delinquency.
Understanding the Increase in Mortgage Delinquencies
The 3.72% delinquency rate represents a 15 basis point increase from December 2023, although it was down 2 basis points compared to November 2024. This suggests that while more homeowners are struggling with payments, the situation has not yet worsened into a full-blown foreclosure crisis.
Key Takeaways from the Report:
• Foreclosure starts averaged 26,800 per month in 2024, a 6% decline compared to 2023.
• Foreclosure sales dropped 5.6% year over year in December.
• Serious delinquencies (90+ days past due) have been gradually increasing.
While early-stage delinquencies are on the rise, ReadySetLoan emphasizes that foreclosure prevention programs, loan modifications, and strong homeowner equity levels have helped reduce the number of foreclosures.
Mortgage Distress Varies by Location
Delinquency rates are not uniform across the country—some states are experiencing more mortgage distress than others.
States with the Highest Non-Current Mortgage Rates:
1. Louisiana – 8.6%
2. Mississippi – 8.3%
3. Alabama – 6.1%
4. Indiana – 5.7%
5. Arkansas – 5.6%
These states, particularly Louisiana and Mississippi, have faced economic challenges, natural disasters, and rising homeownership costs, contributing to higher delinquency rates.
States with the Lowest Non-Current Mortgage Rates:
1. Oregon – 2.3%
2. Colorado – 2.2%
3. Idaho – 2.1%
4. Washington – 2.1%
5. Montana – 2.1%
These states have stronger employment markets and fewer financial stressors, leading to lower rates of missed mortgage payments.
What’s Causing Higher Delinquency Rates?
According to ReadySetLoan, several factors are contributing to rising mortgage delinquencies:
1. Economic Pressures & Inflation
• Homeowners are still adjusting to the impact of post-pandemic inflation, leading to higher living costs, insurance premiums, and property taxes.
• Fixed-income households, in particular, are finding it difficult to keep up with rising expenses.
2. Natural Disasters & Insurance Costs
• States like Louisiana, Mississippi, and Florida continue to be hit by hurricanes, flooding, and rising home insurance costs, making it harder for homeowners to stay current on their loans.
• Increased property insurance rates have been a major concern, especially in disaster-prone regions.
3. The End of Pandemic-Era Assistance
• Many COVID-19 relief programs, such as mortgage forbearance and foreclosure moratoriums, have ended, leading to a slow but steady rise in mortgage distress.
4. Variable-Rate Mortgage Adjustments
• Homeowners with adjustable-rate mortgages (ARMs) have seen higher interest rates, causing unexpected payment increases.
What Does This Mean for Homeowners?
While delinquencies are up, foreclosure prevention efforts and homeowner equity levels remain strong. This means most struggling homeowners still have options to avoid foreclosure.
How Homeowners Can Stay Ahead:
1. Review Your Mortgage Terms – If your mortgage payments are becoming unmanageable, consider refinancing or adjusting your loan terms. ReadySetLoan can help you explore options.
2. Understand Your Equity – With home values still relatively high, selling may be a better option than foreclosure if payments become unmanageable.
3. Check for Assistance Programs – Government and lender assistance programs can provide relief if you’re struggling with payments.
4. Monitor Your Insurance & Tax Costs – Rising home insurance and property tax rates are a growing burden, so homeowners should regularly review policies and plan for potential increases.
Final Thoughts: What’s Next for the Mortgage Market?
Experts predict that delinquency rates may continue to fluctuate but are unlikely to spike dramatically. The current trends suggest a return to pre-pandemic norms rather than a full-blown housing crisis.
At ReadySetLoan, we’re committed to helping homeowners stay informed and financially secure. If you’re feeling the pressure of rising costs or mortgage payments, don’t wait until it’s too late—reach out to ReadySetLoan today for expert advice on refinancing, loan modifications, and financial planning.
Stay ahead of the market, protect your home, and make informed financial decisions with ReadySetLoan!
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