More Americans At Risk of Losing Their Homes This Year Than Last

More Americans are at risk of losing their homes this year compared to 2023, according to new mortgage data from Intercontinental Exchange.
While the delinquency rate dropped in August, it was still 5 percent higher than last year, indicating more Americans might be having trouble paying off their mortgages in 2024.
The national delinquency rate fell three basis points to 3.34 percent last month, declining by 0.9 percent from July. And the number of borrowers with a single payment past due dropped by 26,000, but those who had 60-day delinquencies rose by 1,000, the report found.
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“Although foreclosure rates are still below pre-pandemic levels, there has been a slight uptick in serious delinquencies,” Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek.
“This could be attributed to rising mortgage payments. For many Americans, the increasing costs of insurance and property taxes are pushing their overall payments higher than they had anticipated.”
There was bad news for serious delinquencies too. That number, which encompasses loans 90 days or more past due but not in active foreclosure, increased by 14,000, reaching a six-month high.
“With home payments taking up a large share of household budgets, mortgage delinquency can be a visible sign of financial hardship or stress for consumers,” Danielle Hale, chief economist for Realtor.com, told Newsweek. “Fortunately, the data show that month-to-month momentum is good—delinquency rates and foreclosure starts both dipped—but the year-to-year momentum is mixed with delinquency rising and foreclosure starts falling.”
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For foreclosure starts, the number dropped by 9 percent from July. However, foreclosure starts are still 32 percent below 2019 levels.
“While a minor uptick year-over-year is nothing to praise, it’s not as troubling of a sign as some might think,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Any increase in delinquency and foreclosure rates is bad news, but both of these rates are still solid when you consider historical averages.”
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Title and escrow expert Alan Chang said the current numbers reflect market conditions attempting to return to normal.
“There are still millions of homeowners that are enjoying historical low interest rates,” Chang told Newsweek. “That reduces monthly mortgage payments, and helps affordability, and slows the potential population of defaults coming into play.”
Housing affordability has continued to be a struggle for many Americans, and those who have already signed onto mortgages are still feeling the strain.
Mortgage rates have recently lowered, but those who signed on during high interest rates may find themselves up against financial difficulties.
Still, Redfin found the median mortgage payment went down 2.7 percent from a year ago in September, coming in at $2,534.
Even with these improvements in interest rates, the typical household still earns 27 percent less than what’s necessary to afford a home, Redfin found. And the median home price for properties is up 5.4 percent from a year ago at $398,475.
“The housing market remains relatively stagnant, largely because many homeowners are sitting on low-interest-rate loans and are reluctant to sell,” Thompson said. “The Federal Reserve is attempting to unlock some of this housing inventory by adjusting policies, which could lead to more homes hitting the market and, ideally, lowering prices.”
The lack of affordability has caused existing home sales to drop by 2.5 percent from July to August, according to the National Association of Realtors (NAR).
That’s a 4.2 percent decrease from August 2022.
Home inventory has also grown, surging by 0.7 percent from July to August to 1.35 million homes on the market.
Experts say if more foreclosures do occur, there could be a slight decrease in home prices, but the housing market tends to move slowly.
“Each individual needs to crunch the numbers to see if renting or buying is the best option,” Chang said previously. “There is no magic one-sized solution.”