The report reveals that 20% of mortgage holders also carry student loan debt, rising to nearly 30% among FHA borrowers. Borrowers behind on student loans are four times more likely to default on mortgages. While the national delinquency rate decreased to 3.2%, it remains elevated year-over-year. Recent homebuyers with limited equity are particularly vulnerable as home prices soften. ICE data indicates increased negative equity in CRT securitizations, necessitating proactive risk management and borrower engagement to prevent future hardships.
Nearly 20% of mortgage holders also have student loan debt, climbing to almost 30% among FHA borrowers. Those behind on student loans are four times more likely to be delinquent on mortgages.
Despite a 2 basis points decrease in the national delinquency rate to 3.2% in May, it remains up 16 basis points year over year, indicating market stress.
Locally, early signs of financial exposure among recent homebuyers indicate the necessity for monitoring borrower-level risk as market conditions evolve.
ICE Home Price Dynamics data shows modest upticks in negative equity rates in recent CRT securitizations, illustrating the impact of softening home prices.
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