Right now, mortgage debt across the U.S. is climbing, with homeowners owing a total of almost $13 trillion by mid-2025. While that might sound concerning, the reality is that today’s lending standards are far stricter compared to the shaky practices that led to the housing crisis in 2008.
Over half of this mortgage debt is backed by government-sponsored loans, primarily through agencies like Fannie Mae and Freddie Mac, making them safer bets. However, loans insured by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) account for nearly one-fifth of all mortgages. These FHA loans, popular with first-time buyers because of lower down payment requirements, have shown significantly higher delinquency rates. In fact, FHA loans alone make up nearly 40% of all overdue payments, despite representing just 12% of total mortgage balances.
The good news? Overall delinquency rates remain historically low at around 2%, suggesting most borrowers are keeping up. Yet, FHA loans, particularly concentrated in southern states and Puerto Rico, continue to warrant close monitoring.
Looking forward, slight home price dips might put more pressure on FHA borrowers who typically enter the market with less equity. For the broader market, though, things appear stable and strong. It’s always wise, however, to stay informed and understand your loan terms clearly to avoid surprises down the road.