Inflationary pressures in the fourth quarter of 2022 led to a 51 basis point increase in the delinquency rate for mortgage loans on one- to four-unit residential properties, a sharp jump from the previous quarter following slower hiring and rising unemployment at the close of 2022, HousingWire reports. Delinquency rates tracked by the Mortgage Bankers Association (MBA) include loans that are at least one payment past due but not loans in the foreclosure process. Overdue payments rose across all loan types and stages of delinquency in Q4 2022.
“As expected, the overall national mortgage delinquency rate increased in the fourth quarter of 2022 from its previous quarterly survey low,” Marina Walsh, MBA’s vice president of industry analysis, said.
For the past 15 years, mortgage delinquencies have tracked very closely with employment conditions, Marina Walsh, MBA’s vice president of industry analysis, noted.
While recent indicators pointed to resilience in the job market, the MBA forecasts slower hiring and rising unemployment, with the interest rates hitting 5.2% by the end of 2023. This in turn, will likely mean further increases in mortgage delinquencies, the MBA said.
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