Mortgage debt across the U.S. has continued its steady climb, reaching nearly $13 trillion by mid-2025. While this growth might seem alarming, the current lending standards remain significantly stricter than those seen before the 2008 financial crisis, reducing overall risk.
Government-backed loans from agencies such as Fannie Mae and Freddie Mac account for over half of the total mortgage balances, offering stability to the market. However, loans insured by the Federal Housing Administration (FHA), popular for their low down payment requirements, represent a disproportionate share of delinquencies. Although FHA loans make up just 12% of all mortgage balances, they account for nearly 40% of overdue payments, highlighting their increased risk.
Despite this concern, overall delinquency rates are still historically low, hovering around just 2%, which suggests most homeowners are managing their mortgages effectively. However, the concentration of higher-risk FHA loans, particularly in southern states and Puerto Rico, is something both lenders and borrowers need to keep an eye on.
Looking ahead, even minor declines in home prices could particularly strain FHA borrowers, who typically enter the housing market with less equity. Nonetheless, the broader mortgage market remains stable and secure. Staying informed and closely reviewing loan terms remains essential for every borrower to maintain financial health.
