Housing affordability challenges are weighing on not only would-be buyers, but also on a growing share of existing homeowners, new data suggests.
Late-stage mortgage delinquencies — those with payments at least 90 days past due — rose 18.6% in December from a year earlier, according to new research from credit scoring company VantageScore. While the share of mortgages at that stage of nonpayment remains small at about 0.2% — up from just under 0.17% in December 2024 — the growth is occurring at a faster pace than for delinquencies involving other types of consumer credit, including auto loans, credit cards and personal loans, said Rikard Bandebo, chief strategy officer and chief economist for VantageScore.
Compared with the nonpayment levels seen during the financial crisis in 2008 to 2010, “this is a considerably lower delinquency rate,” Bandebo said. “But it’s still a concerning sign that [delinquencies] are increasing.”
As of the third quarter last year, mortgage delinquencies of all stages were 1.78% of outstanding home loans, up slightly from 1.74% a year earlier, according to the Federal Reserve Bank of St. Louis. In the first quarter of 2010, that share was 11.49%.
Americans owed $13.07 trillion on 86.67 million mortgages, also as of the third quarter of 2025, according to a LendingTree analysis of Federal Reserve Bank of New York data. Based on these figures and the St. Louis Fed’s delinquencies data, the number of delinquent mortgages could be about 1.5 million.
This recent rise in delinquencies helped push the average VantageScore credit score down to 700 in December, a one-point decline from November and a two-point drop from a year earlier.
Home prices are easing but remain high
Affordability issues have taken center stage as households continue struggling to absorb higher prices. Costs for everyday purchases have jumped more than 25% since January 2020, according to the consumer price index.
Many would-be homebuyers have been priced out of the market due to constraints on inventory, prices that have surged over the last five years and elevated mortgage rates. Although the market shows some signs of easing, the median sale price of a single-family home was $409,500 in December, according to the National Association of Realtors.
While that amount is down from the June 2025 high of $435,300, it remains far above home prices heading into the pandemic. From January 2020 through November 2025, home prices jumped 54.5%, according to the S&P Cotality Case-Shiller U.S. National Home Price Index.
Separately, a new analysis from the Realtor.com economic research team examined what it would take to return housing affordability to pre-pandemic levels, when the typical mortgage payment consumed about 21% of the median household income, compared with more than 30% today, according to the research.
The analysis found that one of three things would have to happen: mortgage rates would have to fall to about 2.65% from the current 6.16%; median household income would need to rise 56% to $132,171 from an estimated $84,763 currently; or home prices would need to drop 35% to a median of $273,000 from about $418,000 last year.
Other expenses associated with homeownership are also rising. For example, homeowners insurance rose about 6.5% in 2025 and is up 31.3% between January 2020 and December 2025, according to the Producer Price Index. Property taxes also generally climb over time as home values rise.
‘Leave room for the unknowns’
For potential homebuyers, rising delinquency rates may serve as a reminder to avoid buying a house they can’t afford.
“Just because a lender approves you for a certain amount doesn’t mean you should spend it,” said certified financial planner Thomas Blackburn, a partner, vice president and senior financial planner with Mason & Associates in Newport News, Virginia.
“Their maximum is what they think you can bear, not what’s comfortable,” Blackburn said. “Leave room for the unknowns, for saving and for actually enjoying your life.”
The general rule of thumb is to keep your mortgage payments — including property taxes and homeowners insurance — to no more than 28% of your income, although some advisors recommend an even lower cap to leave room for the unexpected.
“One expense people often underestimate is ongoing maintenance,” said CFP Kate Feeney, a vice president and wealth advisor with Summit Place Financial Advisors in Summit, New Jersey.
“A simple rule of thumb is to set aside about 1% to 2% of the home’s value each year for repairs and upkeep,” Feeney said.
Additionally, don’t overlook the importance of emergency savings.
“Having three to six months of living expenses set aside provides flexibility and peace of mind, especially in the first year when unexpected costs tend to surface,” Feeney said.
