U.S. residential mortgage delinquency rates ticked higher in the third quarter of 2025, data from the Mortgage Bankers Association show, as growing economic pressures and consumer debt pushed more borrowers past due on monthly payments. At the close of Q3, 3.99% of outstanding loans on one-to-four-unit properties were at least one payment late—a seven basis point increase from the same period last year. Foreclosure starts also rose slightly to 0.20%, up three basis points from Q3 2024, according to MBA’s latest survey.
Although these increases are modest, the data highlights pockets of strain—particularly among borrowers with Federal Housing Administration loans. The seriously delinquent rate for FHA mortgages, which includes loans 90 days or more overdue and those in foreclosure, climbed to 4.10% (non-seasonally adjusted) and to 10.79% on a seasonally adjusted basis.
This represents a nearly 50-basis-point year-over-year jump. In contrast, conventional and Veterans Affairs loan delinquency rates remained relatively steady, with seasonally adjusted rates of 2.62% and 4.50%, respectively.
Overall, the 30-day delinquency rate increased to 2.12%, while the rate for loans overdue by 60 days grew to 0.75%. The proportion of mortgages in the 90-day delinquency category held steady at 1.11%. MBA’s figures do not include loans already in the foreclosure process, which stood at 0.20% of all outstanding loans at quarter’s end.
Geographically, the largest quarterly increases in residential mortgage delinquencies surfaced in Arizona (up 29 basis points), Louisiana (28 basis points), Indiana (28 basis points), Iowa (26 basis points), and Texas (24 basis points).
MBA Vice President of Industry Analysis Marina Walsh attributed much of Q3’s increase to deteriorating FHA loan performance, noting that conventional and VA delinquency rates have remained relatively flat. The MBA also cited ongoing economic stressors, including a softening labor market, rising consumer debt, and higher non-mortgage expenses—such as property taxes, homeowners’ insurance, utilities, and fees—as contributing factors.
Impact from recent end-of-pandemic FHA loss mitigation programs and a historically lengthy government shutdown had yet to be reflected in Q3 data but may affect future results.
Meanwhile, multifamily housing appears increasingly vulnerable. LeaseLock Chief Economist Greg Willett pointed to rising credit card debt as a sign that some households are relying on unsecured borrowing for daily expenses, linking consumer debt trends with higher rent delinquencies and warning of further strain ahead.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.