What Mortgage Delinquencies Mean for Foreclosures

You may be seeing headlines about rising foreclosures. If that makes you nervous that we’re headed for another housing crash, here’s what you need to know.

During the housing crisis from 2007–2011, over nine million people went through a distressed sale. By contrast, in the past year, there were just over 300,000. Even with a recent uptick, today’s numbers are far lower than those seen during the crash.

So, is a wave of foreclosures coming? The short answer: no.

Why Mortgage Delinquencies Matter

Industry experts monitor mortgage delinquencies (loans over 30 days past due) as an early warning sign of possible foreclosures. Current data shows that delinquency rates are steady compared to last year, which suggests stability in the broader housing market.

While FHA loan borrowers currently make up a larger share of new delinquencies, delinquency rates across other loan types remain low and stable. This is very different from 2008, when all loan categories showed elevated risk.

What This Means for Homeowners

Even though some homeowners are feeling financial pressure, the overall mortgage market is stronger today. Homeowners also have near-record levels of equity, giving them options that weren’t available during the housing crash.

For those struggling, contacting a mortgage provider is the first step. Many lenders can offer repayment plans or loan modifications. And for homeowners with equity, selling may be a way to avoid foreclosure entirely.

Bottom Line

While foreclosures are rising slightly, they remain nowhere near the levels of the 2008 housing crash. Mortgage delinquency data does not point to a crisis ahead, though experts will continue to monitor trends.

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