More Americans are falling behind on their mortgage payments. The share of loans classified as “seriously delinquent” — defined as 90 or more days past due — has risen about 14% year over year, signaling growing distress among homeowners.
That uptick in delinquencies has produced the first increase in foreclosure sales in nearly two years. Foreclosure activity had been subdued during the pandemic and its immediate aftermath, but the recent rise in seriously delinquent loans has begun to translate into more properties moving toward repossession.
The situation is particularly acute for veterans. A major federal foreclosure-prevention program recently ended, and as a result an estimated 60,000 former service members now face heightened risk of losing their homes. Many veterans relied on the program’s protections and assistance to stay current on mortgage payments when financial pressures mounted.
These developments occur against the backdrop of a tough housing market. Mortgage rates remain elevated compared with recent lows, increasing monthly payment burdens for new buyers and homeowners who refinance. At the same time, the cost of living and homeownership expenses — including insurance, property taxes and maintenance — have continued to rise, squeezing household budgets. Changing buyer preferences, such as a shift in demand between urban and suburban areas, have also affected resale markets and home values in some regions.
Analysts point to several drivers behind the rise in serious delinquencies. Some homeowners are experiencing income shocks from job loss, reduced hours or medical expenses. Others are carrying higher debt loads after taking on consumer credit during periods of higher spending. For homeowners with adjustable-rate mortgages or shorter-term introductory rates, scheduled payment increases can push monthly obligations above what household budgets can sustain.
Foreclosure prevention programs and loss-mitigation options — including loan modifications, forbearance agreements and repayment plans — can help many struggling borrowers stay in their homes. However, the recent termination of a federal support program that served many veterans removes one important avenue of assistance for that population. Without replacement support or robust outreach, affected veterans could face accelerated foreclosure timelines.
Policy makers, housing advocates and servicers are monitoring the trend closely. Some recommend expanding targeted relief programs, improving access to counseling and legal assistance, and enhancing coordination between federal, state and local resources to prevent avoidable foreclosures. Lenders and servicers can also play a role by offering flexible loss-mitigation options and proactively contacting at-risk borrowers to find workable solutions.
For homeowners concerned about falling behind, experts advise taking action early. Contacting the mortgage servicer to discuss hardship options, exploring eligibility for government or nonprofit assistance, and seeking free housing counseling can all improve the chances of reaching a manageable resolution. Keeping financial records organized and understanding the terms of any proposed modification or repayment plan are important steps before accepting a new agreement.
While the recent rise in serious delinquencies and foreclosure sales is a troubling sign, coordinated interventions and timely assistance can reduce the number of homes ultimately lost to foreclosure. The coming months will be crucial for how lenders, policymakers and community organizations respond to prevent further escalation, especially for vulnerable groups such as veterans who recently lost critical protections.