The Mortgage Bankers Association (MBA) reported a notable drop in the delinquency rate among mortgage loans on one-to-four-unit residential properties in the second quarter. MBA’s National Delinquency Survey indicated that the delinquency rate dropped 11 basis points from the previous quarter to 3.93 percent among all loans outstanding.
Notably, the delinquency rates calculated based on the survey results account for loans that are at least one payment past due but not those in the process of foreclosure.
“The seasonally-adjusted mortgage delinquency rate declined to 3.93 percent in the second quarter and remains below the historic average of 5.21 percent dating back to 1979,” MBA Vice President of Industry Analysis Marina Walsh said in a press release. “Conventional loan performance continues to perform exceptionally well, with delinquencies hovering near record lows. This contrasts with the rise in government delinquencies over the past few years.”
The total seasonally-adjusted delinquency rate calculation was also 4 basis points lower compared to one year prior and the percentage of loans on which foreclosure actions were started decreased by 3 basis points to 0.17 percent in the second quarter.
The labor market has shown early signs of weakness, according to Walsh, who has noticed increases in balances and delinquencies involving other forms of consumer debt, which could be a precursor to future increases in mortgage delinquencies as well. These other forms of debt include debt from student loans, credit cards and auto loans.
“While overall mortgage delinquencies are relatively flat compared to last year, the composition has changed,” Walsh said. “Earlier-stage delinquencies declined while serious delinquencies – those loans 90 or more days delinquent or in foreclosure – increased. This was the case in the second quarter of 2025 across the three major product types: conventional, Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA).”
By stage, the 30-day delinquency rate decreased 4 basis points to 2.1 percent, the 60-day delinquency rate dropped 1 basis point to 0.72 percent and the 90-day delinquency rate fell 6 basis points to 1.11 percent.
By loan type, the total seasonally adjusted delinquency rate for conventional loans decreased 10 basis points to 2.6 percent compared to the first quarter. The total seasonally adjusted delinquency rate for loans issued by the FHA fell by 5 basis points to 10.57 percent, and the rate for loans issued by the Department of VA saw a seasonally adjusted decline of 31 basis points to 4.32 percent.