Mortgage delinquencies rise amid housing affordability concerns

Housing affordability challenges are weighing on not only would-be buyers, but also on a growing share of existing homeowners, new data suggests.

Late-stage mortgage delinquencies — those with payments at least 90 days past due — rose 18.6% in December from a year earlier, according to new research from credit scoring company VantageScore. While the share of mortgages at that stage of nonpayment remains small at about 0.2% — up from just under 0.17% in December 2024 — the growth is occurring at a faster pace than for delinquencies involving other types of consumer credit, including auto loans, credit cards and personal loans, said Rikard Bandebo, chief strategy officer and chief economist for VantageScore.

Compared with the nonpayment levels seen during the financial crisis in 2008 to 2010, “this is a considerably lower delinquency rate,” Bandebo said. “But it’s still a concerning sign that [delinquencies] are increasing.”

As of the third quarter last year, mortgage delinquencies of all stages were 1.78% of outstanding home loans, up slightly from 1.74% a year earlier, according to the Federal Reserve Bank of St. Louis. In the first quarter of 2010, that share was 11.49%.

Americans owed $13.07 trillion on 86.67 million mortgages, also as of the third quarter of 2025, according to a LendingTree analysis of Federal Reserve Bank of New York data. Based on these figures and the St. Louis Fed’s delinquencies data, the number of delinquent mortgages could be about 1.5 million.

This recent rise in delinquencies helped push the average VantageScore credit score down to 700 in December, a one-point decline from November and a two-point drop from a year earlier. 

Affordability issues have taken center stage as households continue struggling to absorb higher prices. Costs for everyday purchases have jumped more than 25% since January 2020, according to the consumer price index.

Many would-be homebuyers have been priced out of the market due to constraints on inventory, prices that have surged over the last five years and elevated mortgage rates. Although the market shows some signs of easing, the median sale price of a single-family home was $409,500 in December, according to the National Association of Realtors.

While that amount is down from the June 2025 high of $435,300, it remains far above home prices heading into the pandemic. From January 2020 through November 2025, home prices jumped 54.5%, according to the S&P Cotality Case-Shiller U.S. National Home Price Index.

Separately, a new analysis from the Realtor.com economic research team examined what it would take to return housing affordability to pre-pandemic levels, when the typical mortgage payment consumed about 21% of the median household income, compared with more than 30% today, according to the research.

The analysis found that one of three…