The share of mortgages backing small, multifamily properties that are overdue has long been elevated compared to other property types.
However, it is the only asset class whose proportion of delinquent mortgages dropped year over year in the first quarter, when 2.02 percent of mortgages for properties with two to four units were overdue by 60 or more days, according to data from the Federal Reserve Bank of Philadelphia. That figure was down from 2.07 percent the same time last year, a drop of about 2.4 percent.
Meanwhile, the percentage of delinquent townhouse-backed mortgages rose the most, by 16.67 percent year over year. However, this share is, overall, lower than that of other groups. Just 0.56 percent of mortgages for these properties were overdue in the first quarter.
The residential property type with the second-highest share of overdue mortgages is single-family homes, as 1.55 percent haven’t been paid for at least 60 days. That’s up from 1.51 percent in the first quarter of 2024, a nearly 2.7 percent increase.
The share of condo and co-op mortgages that have gone unpaid came in at 0.73 percent in the first quarter, up by 2.8 percent from the year before.
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There are other signs of concern in the home loan space, as high interest rates and economic uncertainty continue to put pressure on the real estate market.
In July, the number of residential mortgage foreclosure filings hit 36,000, a 13 percent year-over-year surge. The first half of the year saw some 188,000 properties have such filings, which is the highest half-year count since 2019.
Additionally, the number of homeowners across the country with underwater mortgages — home purchase loans with a higher principal than the property’s market value — hit 500,000 in April, the highest monthly reading since 2020.