Federal Housing Administration (FHA) Mortgage Delinquency Rates Rise

FHA Mortgage Delinquency Rates RiseIn today’s tight credit environment, the most popular type of mortgage loan is one backed by the FHA. Mortgage lenders we’ve interviewed have stressed the importance of FHA loans to the housing industry. Unfortunately, The FHA mortgage delinquency rate hit 9.6% in December, and this is the highest it’s been in the last two years. What’s worse is that this delinquency rate is up almost 19% from a year earlier and up more than 3% from November. The same report also showed that loan origination is declining at a steep rate too.

This means that more people are falling behind on their mortgages. I attribute this to the job market. While unemployment is reportedly falling, millions of people are still out of work and pouring through their savings and reserves. The unemployment rate does not factor in people that are employed, but making substantially less than they were before the recession hit. Many people who are employed, are making 20-50% less than they used to make; which means people who are employed are still falling behind too.

We need job creation. With job creation will come the economic recovery we all seek and the ensuing rebound in the housing market. As jobs are created, people will start spending money, investing and buying homes again.

Stick with us for up to date reports on everything real estate related. Pay close attention to the job markets. Once we see the job markets rebound, we will see economic growth and the housing market will soon follow.

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