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- Mortgage delinquencies rose a seasonally adjusted 8.22% in the second quarter to a nine-year high, according to a Monday report from the Mortgage Bankers Association.
- The nearly 4% jump from the previous quarter was the largest in survey history, according to the report.
- In addition, the delinquency rate for FHA mortgages, reserved for first-time homebuyers, jumped to a record high.
- Read more on Markets Insider.
Some homeowners are struggling to pay their mortgages amid the coronavirus pandemic as the ensuing recession continues to slam the labor market, according to a Monday report from the Mortgage Bankers Association.
Overall mortgage delinquencies rose a seasonally adjusted 8.22% in the second quarter, according to the MBA. That marked a nine-year high, and a nearly 4% increase from the previous quarter, the largest quarterly jump in the survey’s history.
“The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent,” said Marina Walsh, MBA’s vice president of industry analysis, in a statement.
Some homeowners were hit harder than others, according to the report. The delinquency rate for FHA mortgages -which are reserved for first-time homebuyers and used by many minorities and low-income Americans – surged to nearly 16% in the second quarter, an all-time high.
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Currently, most of the homeowners struggling to pay their mortgage are protected from foreclosure by the federal forbearance program, which allows them to defer payments for a year without penalty due to the coronavirus pandemic. In early August, President Donald Trump signed an executive order aimed at extending the federal eviction and foreclosure moratoriums amid the pandemic.
Mortgage delinquencies generally track closely with the availability of jobs, according to the Monday report. Although the labor market has improved since record jobs lost in April, the pace of the recovery has slowed. As of July, the unemployment rate is still an elevated 10.2%, and the US has to recover roughly 13 million jobs to reach pre-pandemic levels.
The states with the highest surges in mortgage delinquency rates were New Jersey, Nevada, New York, Florida, and Hawaii, all states that have a large number of leisure and hospitality jobs, the industry hardest hit by the pandemic, according to the MBA.
“Certain homeowners, particularly those with FHA loans, will continue to be impacted by this crisis, and delinquencies are likely to stay at elevated levels for the foreseeable future,” said Walsh.