TransUnion: Mortgage Delinquencies Tick Up but Remain Low
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TransUnion, Chicago, released its Q3 2024 Credit Industry Insights Report, finding that mortgage delinquencies have slowly begun to increase among consumers.
TransUnion reported that for Q3 2024, the 60+ days-past-due delinquency rate was at 1.22%. That’s up from .95% in Q3 2023 and .82% in Q3 2022.
However, that’s still a very low rate compared with historical levels. TransUnion also noted that the majority of mortgage accounts and balances are held by 760+ risk score consumers.
“It is worth watching to see if, now that the Federal Reserve has begun lowering interest rates, the mortgage origination market may begin to see growth after a lengthy sluggish period. The year-over-year increase in delinquencies is certainly something worth monitoring,” said Satyan Merchant, Senior Vice President, Automotive and Mortgage Business Leader at TransUnion. “However, it’s important to note that current delinquency rates remain low in comparison to long-term measures. It remains to be seen if the aforementioned interest rate reductions and cooling inflation help stem this increase in the coming quarters.”
The total balance of all mortgage loans stands at $12.3 trillion, up from $11.8 trillion in Q3 2023 and $11.5 trillion in Q3 2022. Originations were flat in Q3.
Looking at the credit landscape more broadly, TransUnion has found evidence that there’s been some stabilization in the consumer credit market, including balance growth slowing in many credit products.
For example, credit cards saw a smaller increase in balances from Q3 2023 to Q3 2024 compared with the same period from 2022-2023. And, the percentage of consumers 90-plus days-past-due increased by just nine basis points year-over-year, compared with 40 basis points in the same period from 2022-2023.
The origination of unsecured personal loans increased, but 60-plus day-past-due delinquencies saw year-over-year declines for the second consecutive year. And, monthly car payments have begun to stabilize. While delinquencies have ticked up on auto loans, the rate of growth is continuing to slow.
