Mortgage delinquency rates climbed to 4.44 percent in the first quarter of 2026, even as consumer credit origination expanded across multiple categories, reflecting a credit market split between strong demand for new loans and rising difficulty among existing borrowers.
The Mortgage Bankers Association reported that the delinquency rate rose 18 basis points from the fourth quarter of 2025 and 40 basis points year-over-year, with FHA loans hit particularly hard at 11.88 percent—the widest spread between FHA and conventional loans since 2021.
Despite the delinquency uptick, TransUnion’s 2026 originations forecast points to mortgage and unsecured personal loans as primary growth drivers. Mortgage originations are expected to expand 4.0 percent for purchases and 4.2 percent for refinances, while unsecured personal loans are projected to grow 11.2 percent, marking a third consecutive year of annual gains.
The divergence reflects how consumer demand for credit remains strong, even as existing borrowers face strain. TransUnion’s Jason Laky, executive vice president and head of financial services, stated that “consumer demand for credit remains strong across risk tiers and will likely strengthen further if interest rates fall more than expected in the coming quarters.”
A key driver of rising delinquencies is the expiration of pandemic-era FHA relief options at the end of September 2025. The MBA’s Vice President of Industry Analysis, Marina Walsh, noted that the end of these relief programs, combined with required trial payment plans during which FHA loans are still counted as delinquent for survey purposes, has pushed more borrowers into later stages of delinquency and foreclosure.
Housing affordability pressures also underpin the delinquency rise. The Harvard Graduate School of Design’s 2026 housing report points to slowing household growth, weaker housing construction, rising housing costs, and a severe shortage of affordable housing. These conditions have made it harder for existing homeowners to manage payments, even as new borrowers continue seeking mortgages.
Credit card delinquencies are also rising. Credit card delinquencies hit 15-year highs as the 90+ days past due rate reached 2.58 percent in Q4 2025, while unsecured personal loan delinquencies climbed to 3.99 percent—the largest year-over-year increase since early 2023.
The pattern suggests lenders are maintaining disciplined underwriting despite growing originations. TransUnion data shows newer unsecured personal loan accounts originated in early 2025 are performing better than older cohorts, particularly among subprime borrowers, indicating that origination growth is being driven by consumers with improving credit profiles rather than loosening lending standards.
Sources
- Mortgage Bankers Association — Q1 2026 National Delinquency Survey; reported delinquency rate of 4.44%, FHA delinquency of 11.88%, and impact of pandemic-era relief expiration
- TransUnion — Q4 2025 Credit Industry Insights Report and 2026 originations forecast; mortgage, credit card, and unsecured personal loan origination and delinquency data
- Harvard Graduate School of Design — State of the Nation’s Housing 2026 report; housing affordability and supply challenges
