In this article, we will list 25 states with highest mortgage delinquency rates. We will begin by discussing the latest news and trends in real estate prices and mortgage delinquencies. If you want to skip and head straight to the top 11 of our list, go to 10 States with Highest Mortgage Delinquency Rates.
Home buyers in the United States are facing record-high interest rates. The average 30-year fixed mortgage rate currently hovers around 6.8%, which is 2.5 times higher than the record lows of early 2021. In theory, this should lead to a decrease in home prices as demand for housing decreases with rising mortgage rates. However, as we saw in our piece about major cities with the highest home price increases since the pandemic, they are increasing.
The US real estate market is returning to its pre-pandemic trend of home prices growing nearly half a percent every month. According to CNBC, the month-on-month home price growth was recorded at 0.6% in February, this year. So, what is keeping the home prices up despite a record-high 30-year mortgage rate?
Economists at the Federal Housing Finance Agency have published research that might answer this question. According to the research, the lock-in effect is responsible for about 1.3 million fewer home sales in America between Q2, 2022, and Q4, 2023.
In the context of mortgage rates, the lock-in effect refers to the situation when homeowners do not find it economically viable to sell their home because their current home interest rates are lower than the one they would get for a new one. According to The New York Times analysis, around 70% of all mortgage holders currently have rates more than 3% lower than the current rates. Since there is a shortage of homes in the market, their prices are increasing.
Amid these rising home prices and mortgage rates, construction companies that offer housing options with reasonable prices become even more important. One such company is KB Home (NYSE:KBH), which is also one of the largest home-building companies in the country. With a portfolio of more than 680,000 homes, KB Home (NYSE:KBH) is one of the most trusted companies in real estate. It has recently announced the launch of its new community in Moreno Valley, California, by the name of Palmetto. According to KB Home (NYSE:KBH), homes in the Palmetto start from $560,000.
Mortgage delinquency rates have been on the rise in the United States recently. The Q4, 2023 saw a 7 basis point increase in total 90-day mortgage delinquency rates compared to the third quarter of the year. The five states with the largest quarterly increase in their overall delinquency rates were Louisiana, West Virginia, Illinois, Texas, and New Mexico. Four of these states are also part of our list of the 25 states with the highest mortgage delinquency rates. In addition, the 90-day mortgage delinquency rate overall in the US increased by 27.9% in Q4, 2023, compared to Q4, 2022. As of Q4, 2023, the 90-day mortgage delinquency rate in the United States is 0.58%.
Our analysis of the 90-day mortgage delinquency rates of Q4, 2020 to Q4, 2023 revealed that the rate increased for most states on our list over this period. While 90-day mortgage delinquency rates of 24 states on our list decreased between 2020 and 2021, only nine states had a lower rate by the end of 2023 compared to 2020. In addition, while all states had less than a 1% 90-day mortgage delinquency rate in 2021, two states had a 90-day mortgage delinquency rate higher than 1% in 2023. In addition, one entry on our list nearly doubled its 90-day mortgage delinquency rate over three years.
A close-up of a homeowner signing a mortgage document in a residential setting.
With that background, let’s look at the 25 states with the highest mortgage delinquency rates.
Methodology
We used data from the New York Fed Consumer Credit Panel to curate our list of the 25 states with the highest mortgage delinquency rates. Our list is based on the 90-day mortgage delinquency rates as of Q4, 2023. The higher this rate, the higher the state ranks on our list. As a tie-breaker, we used 90-day delinquency rates for Q4, 2022.
For our list, we also analyzed the 90-day delinquency rates of the fourth quarter from 2020 to the same quarter in 2023. The 3-year change in this rate is mentioned in the list. All delinquency rates and three-year change are mentioned to the nearest two decimal places.
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25 – North Dakota
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.57%
3-Year Change in 90-Day Mortgage Delinquency Rate: 1.08%
North Dakota’s 90-day mortgage delinquency rate increased by only 1% over the period of three years. However, compared to 2022, it increased by 22% in 2023.
24 – Rhode Island
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.59%
3-Year Change in 90-Day Mortgage Delinquency Rate: 12.39%
Rhode Island is one of the states with the highest mortgage delinquency rates. However, compared to quarter 4, 2022, its 90-day delinquency rate decreased by 10% in quarter 4, 2023.
23 – District of Columbia
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.61%
3-Year Change in Mortgage Delinquency Rate: 94.94%
From 2020 to 2023, the District of Columbia’s 90-day delinquency rate almost doubled (95% increase). It was 0.31% in Q4, 2020 and 0.61% in Q4,2023. In addition, its 90-day delinquency rate increased by 79% between Q4,2022 and Q4, 2023. It is also among the twenty states with the lowest credit score in 2023.
22 – Ohio
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.61%
3-Year Change in Mortgage Delinquency Rate: 11.43%
Ohio is 22nd on our list of the states with the highest mortgage delinquency rate. In Q4,2023, its 90-day delinquency rate increased by 16% compared to Q4, 2022. Ohio is also among the twenty states with the lowest credit score in 2023.
21 – Nevada
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.63%
3-Year Change in Mortgage Delinquency Rate: 1.74%
Nevada is among the few states on our list that had a lower 90-day delinquency rate in Q4,2023 compared to Q4,2020. However, its 90-day delinquency rates have increased over the last two years.
20 – Alaska
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.64%
3-Year Change in Mortgage Delinquency Rate: 64.64%
Between 2022 and 2023, Alaska saw a massive bump in its 90-day mortgage delinquency rates, as it increased by 157%. It was 0.25% in Q4, 2022 and 0.64% in Q4, 2023. However, it is worth noting that despite high mortgage delinquency rates, Alaska is among the 25 states with the highest credit scores.
19 – Illinois
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.65%
3-Year Change in Mortgage Delinquency Rate: 17.99%
Illinois is also among the few states on our list that managed to lower their 90-day mortgage delinquency rates since 2020. It was 0.80% in Q4, 2020 and 0.62% in Q4, 2021 decreasing by 21%. The 90-day mortgage delinquency rate of Illinois decreased by 6% between Q4,2022 and Q4, 2023.
18 – Georgia
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.65%
3-Year Change in Mortgage Delinquency Rate: 26.81%
Georgia is 18th on our list of the 25 states with the highest mortgage delinquency rates. Its 90-day mortgage delinquency rate was 0.52% in Q4,2020, after which it decreased by 30% to 0.36% in Q4, 2021. However, 90-day mortgage delinquency rates in Georgia increased by 44% between Q4, 2022, and Q4, 2023. Georgia is also among the 5 states with the lowest FICO score in 2023.
17 – South Carolina
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.66%
3-Year Change in Mortgage Delinquency Rate: 15.48%
South Carolina’s 90-day mortgage delinquency rate increased by 15% in the last three years. It was 0.57% in quarter 4, 2020 and 0.66% in Q4,2023. South Carolina is also among the 10 states with the lowest FICO scores in 2023.
16 – Texas
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.67%
3-Year Change in Mortgage Delinquency Rate: 31.07%
The 90-day mortgage delinquency rate in Texas decreased by 21% between Q4, 2020 and Q4, 2021. Texas is also among the five states with the lowest FICO scores in 2023.
15 – West Virginia
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.68%
3-Year Change in Mortgage Delinquency Rate: 2.46%
Among the states on our list, West Virginia showed one of the lowest increases in 90-day mortgage delinquency rates over the last three years. Its 90-day mortgage delinquency rate also decreased by 5% between quarter 4, 2022, and quarter 4, 2023.
14 – Kentucky
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.69%
4-Year Change in Mortgage Delinquency Rate: 7.21%
Kentucky is among the top 15 states with the highest mortgage delinquency rates. Its 90-day mortgage delinquency increased by 34% between Q4, 2022 and Q4, 2023.
13 – Alabama
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.70%
3-Year Change in Mortgage Delinquency Rate: 26.20%
Mortgage delinquency rate in Alabama increased significantly in 2023. Its 90-day mortgage delinquency rate was 0.55% in Q4, 2022 and 0.70% in Q4, 2023, increasing by 26% in one year. Alabama is also among the 3 states with the lowest FICO scores in 2023.
12 – Delaware
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.70%
3-Year Change in Mortgage Delinquency Rate: 14.80%
Delaware is among the nine states on our list that managed to lower their overall 90-day mortgage delinquency rates in the last three years.
11 – Florida
Q4, 2023, 90-Day Mortgage Delinquency Rate: 0.71%
3-Year Change in Mortgage Delinquency Rate: 13.71%
Florida is 11th on our list of the 25 states with the highest mortgage delinquency rates. However, it is also one of the nine states on our list that had a lower delinquency rate in Q4, 2023 compared to Q4, 2020.
Click to continue reading and see the 10 States with Highest Mortgage Delinquency Rates.
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Disclosure: none. 25 States with Highest Mortgage Delinquency Rates is originally published on Insider Monkey.