WASHINGTON–The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.99% of all loans outstanding at the end of the third quarter of 2025, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
The MBA reported its delinquency rate was up six basis points from Q2 2025 and up seven basis points from one year ago. The percentage of loans on which foreclosure actions were started in the third quarter rose by three basis points to 0.20%.
“Mortgage delinquencies increased in third quarter of 2025, led by worsening FHA loan performance,” Marina Walsh, the MBA’s VP of industry analysis, said in a statement. “Since this time last year, the FHA seriously delinquent rate – which includes 90+ day delinquencies and loans in foreclosure – increased by almost 50 basis points. In contrast, the conventional and VA seriously delinquent rates remained relatively flat.”
The ’Stressors’
Added Walsh in the statement. “The stressors on FHA homeowners include a softer labor market, other personal debt obligations, and increases in taxes, homeowners’ insurance and other fees that exacerbate already stretched affordability. Additionally, home price declines in some parts of the country may lessen the ability to sell or refinance.”
Walsh also noted that while the third quarter results were not impacted by the ending of COVID-era FHA loss mitigation options and the recent government shutdown, those events may affect future quarters.
delinquency rate is close to pre-pandemic levels.
Additional Findings
Additional findings in the Q3 data, according to the MBA, include:
- Compared to last quarter, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. By stage, the 30-day delinquency rate increased two basis points to 2.12%, the 60-day delinquency rate increased 4 basis points to 0.76%, and the 90-day delinquency bucket remained unchanged at 1.11%.
- By loan type, the total seasonally adjusted delinquency rate for conventional loans increased 2 basis points to 2.62% over the previous quarter. The total FHA seasonally adjusted delinquency rate increased 21 basis points to 10.78%, and the total VA seasonally adjusted delinquency rate increased 18 basis points to 4.50%.
- On a year-over-year basis, total mortgage delinquencies increased for all loans outstanding. The delinquency rate decreased 1 basis point for conventional loans, increased 32 basis points for FHA loans and decreased eight basis points for VA loans from the previous year.
- The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 0.50%, up two basis points from the second quarter of 2025 and five basis points higher than one year ago.
- The non-seasonally adjusted seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 1.61%. It increased four basis points from last quarter and increased six basis points from last year. The seriously delinquent rate decreased two basis points for conventional loans, increased 30 basis points for FHA loans, and decreased 1 basis point for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate decreased four basis points for conventional loans, increased 47 basis points for FHA loans and increased 4 basis points for VA loans.
- The five states with the largest quarterly increases in their overall delinquency rate were: Arizona (29 basis points), Louisiana (28 basis points), Indiana (28 basis points), Iowa (26 basis points), and Texas (24 basis points).
