Key Takeaways
- FHA loans made up 47.2% of mortgages 60 days or more past due in the third quarter of 2026, the highest concentration in more than 20 years, according to TransUnion.
- The FHA delinquency rate reached 5.60%, up from 4.09% a year earlier, while performance on Fannie Mae, Freddie Mac, and jumbo loans remained stable.
- The overall borrower-level 60-day delinquency rate was 1.64%, up from 1.36% a year earlier, so late payments are rising in one corner of the market, not across all of it.
- Mortgage originations still rose 12.8% year over year to 1.5 million in the second quarter, and refinance volume rose about 40%.
Mortgage trouble is not spreading evenly. It is piling up in FHA loans, the loans many first-time and low-down-payment buyers use.
TransUnion released its Q3 2026 Credit Industry Insights Report on November 5, 2026. The report covers 54.7 million mortgage loans and $13.1 trillion in balances.
The Late Payments Are Concentrated in FHA Loans
Nearly half of mortgages 60 days past due, 47.2%, are FHA loans. TransUnion data reported by Mortgage Professional America put that share at the highest concentration in more than 20 years.
The FHA delinquency rate itself reached 5.60%. That was up from 4.09% a year earlier.
| TransUnion mortgage measure | Q3 2026 | Year earlier |
|---|---|---|
| Borrower-level delinquency, 60+ days past due | 1.64% | 1.36% |
| Account-level delinquency, 60+ days past due | 1.71% | 1.42% |
| FHA delinquency rate | 5.60% | 4.09% |
| FHA share of mortgages 60+ days past due | 47.2% | Not stated |
| Number of mortgage loans | 54.7 million | 54.5 million |
| Total mortgage balances | $13.1 trillion | $12.7 trillion |
The overall numbers moved much less. The borrower-level rate was 1.64%, up from 1.36% in Q3 2025, 1.20% in Q3 2024, and 0.95% in Q3 2023.
TransUnion states the split plainly. Performance on other loan types, including Fannie, Freddie, and jumbo loans, remained stable.
Satyan Merchant, senior vice president and mortgage business leader at TransUnion, said in the report: “While overall mortgage performance remains relatively stable, the concentration of serious delinquency among FHA loans warrants monitoring.”
He made the same point in plainer terms to Mortgage Professional America. “FHA is becoming more of the driver of delinquency versus maybe back pre-pandemic, it was a more even spread of the drivers, like the different loan types, Fannie, Freddie, Jumbo, et cetera,” Merchant said.
One reason sits in how FHA loans are built. FHA borrowers typically carry higher loan-to-value ratios and smaller down payments, and FHA loans were only 18.5% of new originations even as their share of late payments climbed toward half.
Lending Grew at the Same Time, Led by Refinances and Home Equity
This is not a market where lending stopped. Mortgage originations increased 12.8% year over year to 1.5 million in Q2 2026.
Refinance volume rose approximately 40%. Refinances increased their share of total originations to 21.5%, from 17.4% a year earlier, and rate-and-term refinance volume rose nearly 60%.
“Lower rates created a meaningful lift in mortgage activity during the second quarter, particularly for refinance and home equity lending,” Merchant said in the report.
- Average new mortgage loan: $384,279 in Q2 2026, up from $371,467 a year earlier
- Average balance per borrower: $274,499, up from $268,060 a year earlier
- Home equity originations: up 10.1% year over year to 757,000
- HELOC originations: up 20.3%, and more than half of all home equity originations
That home equity pull matters for context. https://www.unitedstatesrealestateinvestor.com/ice-mortgage-monitor-november-2026-equity-17-5-trillion/ counted a record $17.5 trillion in home equity in the third quarter, so many owners who fall behind still hold a cushion they do not want to lose.
Merchant made that point too. “I don’t think anyone’s ringing any alarm bells right now,” he told Mortgage Professional America.
Rates explain part of the refinance lift. Freddie Mac put the 30-year average at 7.18% on November 5, down for a third straight week, which gave some borrowers a window that did not exist at higher rates.
What a Beginner Investor Should Do With a One-Corner Problem
The fresh insight here is the address of the risk, not just its size. A broad delinquency wave and an FHA-only wave create very different future listings.
- Stop shopping for a general crash. With Fannie Mae, Freddie Mac, and jumbo performance stable, the data do not support waiting for distress everywhere. Underwrite deals that work at today’s prices in your target area.
- Learn where FHA buying was heaviest near you. Entry-level neighborhoods with many low-down-payment purchases are where late payments are concentrating. That is where lender-owned and short-sale supply would appear first if these loans do not cure.
- Expect a slow pipeline, not a flood. A loan 60 days late is not a listing. FHA loss mitigation, forbearance, and loan modification steps sit between delinquency and any sale, so build relationships and watch lists over months, not days.
- Check the equity before assuming a discount. With home equity originations up 10.1% and HELOCs up 20.3%, many stressed owners can sell in the open market and still walk away with cash. Your offer has to beat that simple exit, not just the loan balance.
- Watch credit tighten around the edges. Banks already tightened every commercial real estate loan category in the third quarter in the Federal Reserve survey. If FHA stress keeps rising, expect tougher terms first on the riskiest loans, which changes who your end buyer can be.
For a beginner, the usable move is preparation in the right zip codes. Pull the FHA-heavy streets in your market, learn the price range around the $384,279 average new loan, and be ready with proof of funds before distress there becomes inventory.
The headline rate, 1.64%, looks calm. The 47.2% underneath it tells you exactly where to look.
Data source: TransUnion, Q3 2026 Credit Industry Insights Report, released November 5, 2026. FHA share, FHA rate, account-level rate, and Merchant interview quotes corroborated by Mortgage Professional America on November 6, 2026, and Scotsman Guide on November 5, 2026.
