VantageScore: May Mortgage Delinquencies Increase the Most Among Credit Products

(Illustration courtesy of VantageScore)

Mortgage loans led an increase in early- and mid-stage delinquencies across all credit categories in May, according to new CreditGauge report from VantageScore, San Francisco, Calif.

Home loans saw the largest year-over-year increase in the 30-59 day past-due payment category. Mortgage delinquencies rose from 0.92% in the prior month to 1.03% in May, an indication that the housing sector may be demonstrating early signs of borrower financial stress.

“The rise in early and mid-stage delinquencies this month indicates potential financial strain among some consumers,” said Susan Fahy, executive vice president and chief digital officer at VantageScore. “While consumer behavior generally remains positive, particularly among younger borrowers, mortgages may be an area to watch for increasing credit stress, particularly for traditionally less-risky segments with credit scores above VantageScore 660.”

Early-stage delinquencies rise across most credit tiers:
Credit delinquencies in the 30–59 day past due category rose year-over-year in May across VantageScore’s Nearprime, Prime and Superprime segments. While Subprime late payments declined slightly year over year, somewhat elevated delinquency levels in other VantageScore credit tiers suggest that short-term financial stress is possibly beginning to affect even traditionally lower-risk borrowers.

Average credit balances reach new highs:
The average credit balance rose to $106,000 in May, an increase of $249 (+0.24%) from April, marking the fifth straight month at a five-year high. Year-over-year, balances grew by $1,479 (+1.4%) from May 2024. Mortgage balances showed the largest uptick among product lines, rising 2.8% year-over-year.