The mortgage delinquency rate in California and across the nation increased in February, marking a month-over-month and year-over-year uptick. Despite this rise, the rate remains lower than pre-pandemic levels, according to the latest data from Intercontinental Exchange (ICE). The report highlights financial pressures on homeowners, particularly in areas affected by natural disasters, but suggests that overall stability in the housing market could prevent a more severe spike in delinquencies.
Nationally, the percentage of mortgages at least 30 days past due increased to 3.53% in February, up five basis points from the previous month and 19 basis points from the same period last year. This rate, however, is still 32 basis points lower than it was before the onset of the COVID-19 pandemic in 2020. While mortgage delinquencies have trended upward in recent months, they remain below historical averages, indicating that most homeowners are keeping up with their payments despite economic pressures.
California ranked among the five states with the lowest percentage of non-current loans. The state’s delinquency rate rose to 2.38% last month, an increase from 2.21% in February 2024. This increase, while notable, still reflects a stronger mortgage performance compared to many other regions in the country. However, recent wildfires in Los Angeles contributed to a sharp rise in mortgage delinquencies, as thousands of homeowners faced financial disruptions. Reports indicate that 4,100 homeowners in the affected areas had past-due payments in February, a significant jump from 700 in January. The daily tracking data suggests that the number could rise again in March as more households deal with the financial impact of property damage, displacement, and unexpected costs.
While natural disasters played a role in the delinquency increase in Los Angeles, other factors are influencing mortgage performance statewide. Rising home prices, higher interest rates, and economic uncertainties continue to shape homeowners’ financial stability. Many households are adjusting to increased mortgage costs following the surge in borrowing rates over the past two years. However, the fact that delinquencies remain below pre-pandemic levels suggests that most borrowers have been able to adapt to these conditions.
Looking ahead, the housing market is expected to see continued price growth in 2025. Without an economic downturn, the mortgage delinquency rate is projected to remain relatively stable in the coming year. Affordability challenges may persist, but strong employment levels and wage growth could help prevent widespread mortgage distress. If home prices continue to rise as expected, struggling homeowners may also have the option to sell their properties rather than fall into foreclosure, reducing the likelihood of a major spike in delinquencies.
For homeowners in the San Gabriel Valley, including El Monte, South El Monte, Baldwin Park, Rosemead, and Irwindale, these trends highlight the importance of financial preparedness. While delinquency rates in California remain among the lowest in the nation, the recent increase serves as a reminder that economic conditions can shift. Families dealing with financial strain should explore available resources, including mortgage assistance programs, to avoid falling behind on payments. The stability of the local market will largely depend on employment trends, interest rate movements, and the broader economic outlook in the months ahead.
Mortgage delinquencies are often an early indicator of financial stress, but current trends do not suggest an imminent housing crisis. Instead, the data points to a market that is adjusting to economic pressures while maintaining overall stability. With home prices projected to rise, homeowners in California, particularly those in fire-affected areas, will need to carefully manage their finances to navigate the evolving landscape.
