Arizona Sees Slight Increase in Mortgage Delinquencies

Categories: Arizona Business NewsArizona State News

A view of homes in a typical Arizona neighborhood.

News Summary

Arizona’s mortgage delinquency rate has increased by 0.12%, reflecting a national trend that has seen rates rise to 3.45%. Despite this, Arizona ranks 33rd in the country for delinquencies. The state faces challenges, particularly in Yuma, where delinquencies are notably higher. Rising property taxes and insurance costs are contributing factors, while national metrics show both increases and decreases in foreclosure activity, hinting at a complex housing market landscape.

Arizona has experienced a slight increase in home mortgage delinquencies, continuing a national trend. According to a study conducted by Cotality, a global data research firm, Arizona’s mortgage delinquency rate rose by 0.12% over the past year. Despite this uptick, the state is not among the top ten in the country with the highest delinquency rates.

The national delinquency rate has also seen a notable increase, climbing to 3.45%, which reflects a 6% rise compared to October 2023. This marks the fifth consecutive month of year-over-year increases. In October, the number of homeowners seriously delinquent on mortgage payments reached a 17-month high, with loans that are 90 days or more past due climbing by 7.3% from a year earlier, the highest since May 2023. Moreover, the number of foreclosure starts rose by 12.2%, and foreclosure completions increased by 10.1% month-over-month.

The rising costs of property taxes and insurance are being cited as key factors contributing to this instability in homeownership, especially in states that frequently face natural disasters. Among the states, Florida recorded the largest year-over-year increase in seriously delinquent rates, with a 1.43% rise over the past year.

Despite the national trend, other metrics show some signs of stabilization in Arizona. The state ranks 33rd out of the 50 states in terms of mortgage delinquency rates, contrasting with California’s rank of 48th. Yuma, Arizona, however, has the second-highest mortgage delinquency rate among small U.S. metros, at 5% for loans that are at least 30 days late, with about 1% of mortgages in Yuma being over 90 days delinquent. This indicates a localized issue that stands out in the otherwise moderate delinquency statistics for the state.

On a national level, data from Intercontinental Exchange Inc. (ICE) indicates that foreclosure activity remains a challenge for homeowners across the United States. Foreclosure starts and completions decreased year-over-year but increased in October, indicating fluctuations in the housing market. The foreclosure inventory increased slightly by 1,000 homes, although there were 28,000 fewer loans in active foreclosure compared to the previous year, suggesting a mixed picture of the housing landscape.

As interest rates have eased, there has been a noticeable increase in prepayment activity, which has nearly doubled compared to last October. Additionally, the phenomenon of “zombie foreclosures,” where homeowners abandon properties after receiving a mortgage default notice, saw a significant drop of 32.8% in the third quarter of 2024 compared to the previous year, hinting at a slow recovery in homeowner stability.

A separate report by the Mortgage Bankers Association (MBA) indicates that the delinquency rate for mortgage loans on one-to-four-unit residential properties rose to 4.04% as of the end of the first quarter of 2025, slightly up from earlier quarters. The MBA also reported an increase in foreclosures by 5 basis points, in part due to the end of a voluntary moratorium on VA foreclosures, which may lead to increased foreclosure activity if economic conditions do not improve.

In conclusion, while Arizona’s mortgage delinquency rate has slightly increased, it remains relatively stable compared to other states. However, the rising costs associated with property ownership and a fluid national real estate market could pose challenges for homeowners in the foreseeable future, making ongoing monitoring essential.