VantageScore points to signs of borrower strain even among low-risk credit tiers
Mortgage delinquencies unexpectedly climbed in May, leading a broader rise in early- and mid-stage missed payments across credit categories, according to the latest CreditGauge report by VantageScore.
Home loans posted the largest year-over-year increase in the 30–59 days past due (DPD) category, with mortgage delinquency rates rising from 0.92% in April to 1.03% in May. This marks a potential early signal of financial stress among borrowers, even as overall consumer behavior remains mostly positive.
“The rise in early and mid-stage delinquencies this month indicates potential financial strain among some consumers,” said Susan Fahy, executive vice president and chief digital officer at VantageScore. “While consumer behavior generally remains positive, particularly among younger borrowers, mortgages may be an area to watch for increasing credit stress, particularly for traditionally less-risky segments with credit scores above VantageScore 660.”
Delinquency increases weren’t isolated to mortgages alone. Across the VantageScore credit tiers, early-stage 30–59 DPD delinquencies also ticked up year-over-year in near-prime, prime, and super-prime segments. Subprime segments, however, saw a slight decline.
The rise in delinquencies comes amid a backdrop of increasing consumer debt. The average credit balance across consumer products reached a new high of $106,000 in May, climbing 0.24% month-over-month and 1.4% compared to May 2024. Mortgages drove much of the increase, with balances up 2.8% year-over-year, the largest jump among credit product types.
Data from ICE Mortgage Technology shows continued stress in mortgage foreclosures.
Foreclosure starts jumped 16.73% year-over-year, while foreclosure sales rose 11.37%, marking the third straight month of annual increases as VA foreclosure resumptions continue to move through the pipeline.
Read next: New York court tosses BNY Mellon foreclosure over missed deadline
On a more positive note, prepayment activity edged up, with single-month mortality reaching 0.71%, the highest since October 2024, driven by a seasonal rise in home sale-related prepayments. Prepayments increased 23.4% year-over-year.
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