The costs of everyday living are growing for many Americans. For some, that means falling behind on mortgage payments. The number of mortgages in delinquency ticked upward in February, according to a monthly report from Intercontinental Exchange. While nonpayments remain below national levels before the COVID-19 pandemic, there's also been a sharp rise in severely delinquent loans or those in foreclosure over the past four months.
Federal Housing Administration loans, which require lower down payments, closing costs and qualifying credit scores, made up more than 80% of the jump in nonpayments. Delinquencies and foreclosure rates briefly spiked due to the economic uncertainty of the pandemic, though extensive relief programs helped bring those nonpayment rates sharply down, according to Kate Wood, a lending expert at NerdWallet. In general, experts don't see current delinquency rates as cause for alarm.
What the Left Is Saying
Progressive housing advocates and Democratic policymakers have long emphasized the importance of consumer protections in the mortgage market, particularly for first-time homebuyers who often rely on FHA loans. Housing advocates argue that rising delinquency rates highlight the need for stronger federal support programs and expanded access to affordable housing financing.
"Being unable to pay your mortgage, struggling to pay that bill, feeling the threat of foreclosure is incredibly stressful," Wood said. Housing advocates note that FHA loans serve a critical function in making homeownership accessible to lower-income Americans and those with less-than-perfect credit, and they argue that any increase in delinquencies among these borrowers deserves attention.
Jennifer Fraser, director of stakeholder engagement and grants at GreenPath Financial Wellness, emphasized that free counseling options remain available for homeowners struggling with payments. "If it's keeping you up at night, take action," Fraser said. "There's always a good opportunity to have somebody who's nonjudgmental listen to you and explain your options."
What the Right Is Saying
Conservative economists and housing market analysts often emphasize personal financial responsibility and caution against viewing the current delinquency increase as a crisis. They note that rates remain below pre-pandemic levels and argue that the housing market should function without excessive government intervention.
David Dworkin, president and CEO of the National Housing Conference, which represents a broad coalition including lenders and housing advocates, emphasized that lenders have strong incentives to work with borrowers. "There are ways that a lender can help you because they don't want to foreclose," Dworkin said. "It costs them a lot of money to foreclose."
Market analysts from conservative think tanks have noted that the rise in delinquencies reflects normal market corrections rather than systemic problems. They argue that borrowers should prioritize communication with their servicers and explore market-based solutions rather than relying on government programs.
What the Numbers Show
According to Intercontinental Exchange data, mortgage delinquency rates ticked upward in February. While the increase marks four consecutive months of rising severe delinquencies, current nonpayment rates remain below national levels recorded before the COVID-19 pandemic began in 2020.
FHA loans accounted for more than 80% of the increase in severely delinquent mortgages. These government-backed loans, which require lower down payments and qualifying credit scores than conventional mortgages, are designed to help first-time homebuyers and those with limited savings enter the housing market.
After 90 days of missed payments, loans are considered in serious delinquency and at risk of default. After 120 days of nonpayment, lenders can begin the foreclosure process. The majority of borrowers who are 30 or 60 days late are able to get back on track, according to housing experts.
The Bottom Line
The rise in mortgage delinquencies reflects broader economic pressures facing American households, though housing experts emphasize that current rates do not indicate a crisis. Homeowners who find themselves struggling to make payments are advised to contact their mortgage servicers immediately, as early intervention provides more options.
Experts recommend gathering documentation of any financial hardship, communicating in writing, and exploring options such as forbearance agreements or loan modifications. For those facing more permanent life changes, selling the home may be a preferable alternative to foreclosure, according to housing counselors. Free financial counseling services remain available for homeowners seeking guidance.