Key facts
- The overall mortgage delinquency rate decreased to 4.37% in Q2 2026.
- The share of loans in foreclosure increased to 0.67% in Q2 2026.
- Despite quarterly improvements, delinquency rates for conventional, FHA, and VA loans were higher than a year earlier.
- FHA loans showed particular distress, with seriously delinquent rates rising substantially year-over-year.
- Weakness in the labor market and rising delinquencies in other consumer debt categories may be contributing to homeowner financial stress.
Mortgage delinquencies for one- to four-unit residential properties saw a slight decrease in the second quarter of 2026, according to the Mortgage Bankers Association's National Delinquency Survey. The overall seasonally adjusted delinquency rate fell to 4.37%, down 7 basis points from the first quarter but up 44 basis points from a year earlier.
The share of loans in the foreclosure process increased to 0.67%, a rise of 3 basis points from the previous quarter and 19 basis points from the prior year. Marina Walsh, MBA's vice president of industry analysis, noted that while delinquencies decreased across all loan types quarterly, the broader trend shows increases in both delinquencies and foreclosures over the past year.
Specifically, the 30-day delinquency rate dropped to 2.21%, and the 60-day rate declined to 0.73%. However, the 90-day delinquency rate saw a slight increase to 1.43%. Delinquencies also decreased on a quarterly basis for conventional, FHA, and VA loans. Conventional delinquencies fell to 2.72%, FHA to 11.79%, and VA to 4.89%.
Despite these quarterly improvements, all three loan types had higher delinquency rates compared to the previous year. Conventional delinquencies were up 12 basis points, FHA delinquencies increased by 122 basis points, and VA delinquencies rose by 57 basis points.
Borrowers with FHA loans exhibited particular signs of financial distress. The non-seasonally adjusted seriously delinquent rate, which includes loans that are at least 90 days past due or in foreclosure, rose to 2.06%. This rate was up 3 basis points from the prior quarter and 49 basis points from a year ago. FHA serious delinquencies, in particular, increased by 227 basis points year-over-year, significantly outpacing the increases for conventional and VA loans.
Foreclosure starts declined by 4 basis points to 0.2% of loans in the second quarter, but the foreclosure inventory rate remained nearly 20 basis points higher than a year prior. Walsh cited potential contributing factors such as weakness in the labor market, rising delinquencies in other consumer debt categories like student loans, credit cards, and auto loans, as well as stretched housing affordability and slower home equity accumulation.