A recent report indicates that more Americans may face the risk of home loss this year, compared to 2023, as revealed by new mortgage data from Intercontinental Exchange.
While the national delinquency rate decreased to 3.34 percent in August—down three basis points from July—it’s still up by 5 percent from last year. This suggests that many Americans could be struggling with mortgage payments as we move into 2024.
The data shows that while 26,000 borrowers managed to catch up on missed payments, those with 60-day delinquencies increased by 1,000. “Rising mortgage payments could be a key factor,” explained experts, noting that increasing costs for insurance and property taxes are driving payments higher than what many expected.
A concerning trend is also visible in serious delinquencies, which include loans that are 90 days or more past due but not yet in foreclosure. These rose by 14,000, reaching a six-month peak.
On a brighter note, foreclosure starts declined by 9 percent from July but remain 32 percent lower than 2019 levels. Title and escrow expert Alan Chang remarked that the current statistics might reflect a market trying to stabilize.
Affordability challenges persist for countless Americans. Although mortgage rates have decreased recently, those who locked in during high-interest periods may still encounter financial hurdles. Interestingly, September data from Redfin showed a 2.7 percent drop in the median mortgage payment from the previous year, now at $2,534. However, the typical household still earns 27 percent less than needed to afford a home, with median home prices rising by 5.4 percent to $398,475.
Thompson from Redfin noted that the housing market remains stagnant, partly because many homeowners are hesitant to sell their properties tied to low-interest loans. Efforts by the Federal Reserve to unlock housing inventory might eventually increase market offerings and put downward pressure on prices.
According to the National Association of Realtors (NAR), existing home sales fell by 2.5 percent between July and August, translating to a 4.2 percent drop from August last year. However, home inventory saw a slight uptick, increasing by 0.7 percent to about 1.35 million homes available.
Experts suggest that if foreclosures surge, we might see a minor decline in home prices, but changes in the housing market are typically gradual. “Ultimately, each individual must evaluate their finances to determine whether renting or buying makes more sense,” Chang added.
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