CHART: Late Mortgage Payments Track Almost Exactly To Unemployment Rate

The MBA yesterday released it’s latest data on the rate of late mortgage payments, which rose slightly (3 basis points) to 3.97%. This is still really low, and in the chart, it shows how this mortgage delinquency rate tracks extremely close to the unemployment rate.

In the chart, the unemployment rate shows as 4% because it’s a 2Q number.

The actual latest unemployment rate as of August 2 (for July) is 4.3%.

And today the MBA release projections on unemployment for the coming quarters like this:

2Q24: 4.3%
4Q24: 4.5%
1Q25: 4.6%
2Q25: 4.7%

If this tight correlation between mortgage delinquency and unemployment rates holds, then we could see mortgage delinquencies rise in the coming quarters.

But it’s not a spike, and shouldn’t cause a broad homeowner hardship cycle.

What are your thoughts? Comment below.