A new report from financial research firm WalletHub has identified Vermont as the state with the fastest-growing mortgage delinquency rate in the country, with a 12.32% increase from Q4 2025 to Q1 2026.
The study tracked average delinquent mortgage loans across all 50 states using quarterly data, revealing significant regional disparities in mortgage payment struggles. WalletHub analyst Chip Lupo noted that borrowers typically have until debt is 30 days past due before lenders report delinquencies to credit bureaus.
What the Left Is Saying
Consumer advocacy groups and progressive housing policy advocates say rising delinquency rates highlight the need for stronger federal intervention in housing markets. They argue that without expanded access to forbearance programs and stricter lending regulations, more families risk losing their homes.
"When mortgage delinquency rises this quickly in any state, it signals that working families are being squeezed by housing costs," said a spokesperson for the National Housing Law Project. "We need proactive policies that keep people in their homes rather than reactive measures after defaults occur."
Housing advocates have called on federal agencies to extend and expand mortgage assistance programs, particularly for states experiencing the sharpest increases. They point to Vermont's growth as evidence that even historically stable housing markets are not immune to economic pressures facing American families.
What the Right Is Saying
Fiscal conservatives and free-market economists view rising delinquency rates in certain regions as a natural market correction rather than a policy failure. They argue that temporary spikes reflect individual financial decisions and localized economic conditions, not systemic problems requiring government intervention.
"These numbers reflect normal market fluctuations," said an economist at the American Enterprise Institute. "States like Vermont and Delaware are experiencing adjustments after periods of rapid home price appreciation. The market will correct itself without heavy-handed intervention."
Others suggest that borrowers should pursue existing options like lender-negotiated forbearance directly, rather than relying on expanded federal programs. They contend that encouraging personal financial responsibility and communication with lenders remains the most effective path to avoiding foreclosure.
What the Numbers Show
WalletHub's data shows Vermont led all states with 12.32% delinquency growth from Q4 2025 to Q1 2026. Rounding out the top five were Delaware at 6.92%, Louisiana at 4.4%, Florida at 3.87%, and Montana at 3.41%.
On the opposite end, Wyoming saw the largest decrease at negative 14.41%, followed by Nebraska at negative 7.88% and Mississippi at negative 4.27%. Maine and Missouri each recorded negative 3.37% changes.
When examining overall delinquency share in Q1 2026, Mississippi had the highest percentage of delinquent loans at 15.05%, with Louisiana close behind at 14.33%. Arkansas reported 11.28%, Alabama 10.85%, and West Virginia 10.63%.
"It is important to try to get current on your debt as quickly as possible," WalletHub analyst Lupo stated in the report, recommending that struggling borrowers contact lenders about temporary forbearance options before delinquency is formally reported.
The Bottom Line
The WalletHub data reveals a divided housing market where some states face rising mortgage stress while others show improvement. Vermont's sharp increase despite its reputation as an affordable state underscores how quickly economic conditions can shift for homeowners.
Policymakers will likely watch these trends closely as they assess whether current federal and state housing assistance programs are adequately addressing delinquency risks. Borrowers facing payment difficulties are encouraged to contact their lenders early about forbearance options, which Lupo noted may prevent formal delinquency reporting.