MBA Chart of the Week: Mortgage Delinquency Rates, By Loan Type
By MBA Research & Economics
May 18, 2018
Source: MBA National Delinquency Survey
The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 4.63 percent of all loans outstanding at the end of the first quarter, according to the Mortgage Bankers Association's National Delinquency Survey.
The delinquency rate fell by 54 basis points from the previous quarter and was eight basis points lower than one year ago. Mortgage delinquencies decreased from the previous quarter across all loan types--FHA, conventional and VA--as the effects of the September hurricanes dissipated.
The FHA delinquency rate declined by 136 basis points over the previous quarter--the largest single-quarter decline reported for the NDS data series. The conventional and VA delinquency rates declined by 41 basis points and 17 basis points, respectively, from the previous quarter. On a year-over-year basis, the overall mortgage delinquency rate increased by 93 basis points for FHA loans, dropped by 26 basis points for conventional loans, and increased 42 basis points for VA loans.
The strong economy, low unemployment rate, tax refunds and bonuses and home price appreciation were key factors that helped push delinquencies down in the first quarter. There are offsetting factors that may put upward pressure on delinquency rates in future quarters, including a difficult recovery for some borrowers in hurricane-impacted states; aging loan portfolios; higher interest rates that limit a borrower's rate-term refinance options; higher energy prices; stretched housing affordability given limited supply; and easing credit overlays, as mortgage market conditions have changed.
For more information about the MBA National Delinquency Survey, click https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/national-delinquency-survey.
(Marina Walsh is vice president of industry benchmarking and research with MBA; she can be reached at firstname.lastname@example.org.)