Over 6 million Americans are late on their mortgage payments, according to a study.
Housing remains a difficult financial cost for many homeowners across the country. More than 6.6 million households have fallen behind on their mortgage payments, a study from Deeds.com found. In addition, 9.4 million renters are struggling to make their monthly payments.
Why It Matters
Buying a home remains out of reach for millions of Americans because of inflated home prices and rising interest rates. Last month, borrowing costs on a 30-year home loan surged to 6.85 percent, according to mortgage buyer Freddie Mac. That compares with a much lower rate of 6.61 percent the year before for a 30-year mortgage.
Meanwhile, in some states the number of renters having trouble staying current with their payments is greater than the homeowners who are not on top of their mortgage payments.
A for sale sign is displayed outside of a Los Angeles home on August 16, 2024.
PATRICK T. FALLON/AFP via Getty Images
What To Know
Significant numbers of residents in several states are struggling with making their monthly mortgage payments, according to Deeds.com’s study.
Mississippi came in with the highest number of those with late payments, a whopping 15 percent of households. For renters, that percentage was 21 percent.
Illinois also had a high percentage of those with late housing payments, 13.92 percent of all households, but this was most concentrated among renters, with 24 percent delinquent, according to the study.
Roughly 14 percent of all Delaware households—renters and owners—were behind on their housing payments, while Wyoming had around 12 percent of all residents facing delinquency.
Renters generally struggled more than homeowners to make their payments, especially in places like Texas and New Jersey.
Nearly 19 percent of renters were late on payments in Texas, compared with just 4.5 percent of homeowners. New Jersey had a similar situation, where only 5 percent of homeowners were missing payments but nearly 18 percent of renters couldn’t pay on time.
The study’s results were based on data from the U.S. Census Bureau’s Household Pulse Survey.
What People Are Saying
S. Shepherd, a real estate expert at Deeds.com, told Newsweek: “This really shows how tough things are for a lot of people right now. Even though jobs are out there, wages haven’t kept up with how expensive everything, especially housing, has gotten. Inflation’s outpacing paychecks, and for many families, it only takes one unexpected expense to fall behind. It’s a clear sign that while the economy might look strong on paper, not everyone’s feeling that recovery and housing is where it’s hitting hardest.”
Kevin Thompson, founder and CEO of 9i Capital Group, told Newsweek: “One glaring explanation is rising interest rates—especially for those with variable-rate mortgages. Many borrowers have seen their payments increase substantially, with rates likely doubling from their initial expectations. As a result, people are falling behind on payments.”
The rising cost of insurance is also preventing many Americans from making their mortgage payments, he said.
“Many homeowners bundle their mortgage and insurance payments, which are handled through their lender each year. As insurance costs rise, the amount held in escrow to cover these payments also increases, putting additional financial strain on homeowners,” Thompson said.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek: “It’s first important to note that a relatively small portion of Americans who have a mortgage are late on their monthly payments, so it’s far from being a prominent trend. It is a worrying one, though.”
Title and escrow expert Alan Chang told Newsweek: “The housing market has been unhealthy for about four years now. When mortgage rates were artificially high, the increased buying power created an unhealthy valuation increase across the board due to drastic increase in demand. When interest rates went back to historic averages, this was a sudden stop in the growth rate and impacted affordability twofold: Both values were at the top and mortgage rates were doubled. Now, many households are unable to refinance their way to a lower house payment if expense or income situations change.”
What Happens Next
Thompson recommends that those struggling with payments should reach out to their mortgage provider as soon as possible.
“Many lenders offer solutions to help borrowers stay in their homes, whether through loan modifications, forbearance or other repayment options,” he said. “Open communication with your lender can lead to a mutually beneficial resolution.”