Mortgage Delinquency Rates Rising Faster Among Low-Income Households

Borrowers in lower-income ZIP codes driving growth in mortgage delinquencies, while higher-income areas remain insulated

Published on Feb. 12, 2026

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Mortgage delinquency rates, though close to historically low levels overall, have been inching up in recent years, with borrowers living in lower-income areas facing the biggest challenges. Data from the New York Federal Reserve shows a direct connection between household income levels, location, and rising mortgage delinquency, with the lowest-income ZIP codes seeing delinquency rates surge from 0.5% to nearly 3% in the last quarter of 2025. Higher unemployment rates and falling home prices in certain regions have also contributed to the increase in borrowers falling behind on their monthly payments.

Why it matters

While the U.S. economy continues to show resilience, with strong job growth and rising wages, the data indicates that some Americans, particularly those in lower-income households, are still struggling with higher costs, especially when it comes to housing. The rise in mortgage delinquency rates among this group raises concerns about the potential for increased financial hardship, damaged credit scores, and even the risk of losing their homes.

The details

Researchers at the New York Fed analyzed anonymous credit report data from Equifax and found a clear link between household income levels, location, and rising mortgage delinquency rates. Borrowers in the lowest-income ZIP codes saw their 90-plus-day delinquency rates surge from around 0.5% to nearly 3% in the last quarter of 2025, while delinquency rates were also rising for middle-income borrowers, though not as quickly. Those in the highest-income areas, on the other hand, reported historically lower delinquency rates. The analysis also found that counties with higher unemployment rates and falling home prices experienced steeper increases in mortgage delinquency.

  • In the fourth quarter of 2025, roughly 1.3% of mortgage balances became seriously delinquent.
  • Since 2021, borrowers in the lowest-income ZIP codes have seen their 90-plus-day delinquency rates surge from around 0.5% to nearly 3% in the last quarter of 2025.

The players

New York Federal Reserve

The central banking system of the United States and one of the world's most influential economic institutions, which conducted the analysis on mortgage delinquency rates.

Equifax

One of the largest consumer credit reporting agencies in the world, whose anonymous credit report data was used in the New York Fed's analysis.

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The takeaway

The rise in mortgage delinquency rates among lower-income households highlights the ongoing financial struggles faced by some Americans, even as the broader economy shows signs of strength. This data underscores the need for policymakers and community leaders to address the challenges of housing affordability and economic inequality, to ensure that all Americans have access to stable and affordable housing.