Mortgage Delinquencies Rise: Experts Warn of Financial Stress

Serious consumer-level mortgage delinquency rates have risen from 0.89% in Q2 2023 to 1.27% in Q2 2025, according to TransUnion's analysis. Payment-to-income (PTI) ratios are a key indicator of borrowers at risk of delinquency, with higher ratios correlated to higher delinquency rates. The analysis focused on the impact of rising debt levels and fluctuations in PTI across credit products, such as credit cards, HELOCs, and student loans.

Serious consumer-level mortgage delinquency rates have risen from 0.89% in Q2 2023 to 1.27% in Q2 2025, according to a comprehensive analysis by TransUnion (NYSE: TRU). The study, which examined nearly 57 million mortgage consumers, found a direct correlation between rising payment-to-income (PTI) ratios and increased mortgage delinquency rates [1].

The analysis, conducted by TransUnion, revealed that increases in non-mortgage debt obligations, particularly in credit cards, HELOCs, and student loans, serve as early warning signs for potential mortgage defaults. Credit card PTI ratios rose from 2.18% to 2.33% throughout 2023, correlating with increased mortgage delinquency rates in the following year [1].

The study highlights the predictive power of tracking PTI trends across a consumer's entire credit portfolio. By monitoring these trends, lenders can gain approximately 12 months of advance warning before mortgage performance deteriorates, allowing for timely intervention strategies [1].

The gradually rising delinquency trend itself warrants attention, as it may signal broader consumer financial stress developing despite still-modest absolute levels. The research suggests lenders should implement quarterly monitoring of cross-wallet credit data to identify at-risk borrowers before traditional credit scores capture deterioration [1].

TransUnion's research underscores the importance of PTI ratios in assessing credit risk. The company's sophisticated data analytics capabilities enable it to identify these correlations, positioning itself as an essential partner for lenders navigating increasingly complex credit risk environments [1].

The analysis also found a similar trend when examining PTI ratio patterns for HELOCs and student loans. Rising PTI ratios across these credit products were consistently linked to an increased likelihood of mortgage delinquency, indicating that as borrowers allocate a greater portion of their income toward servicing these debts, their ability to stay current on mortgage payments may become strained [1].

To mitigate rising delinquencies, mortgage lenders should implement a consistent and proactive schedule for collecting consumers’ cross-wallet credit data—ideally on a quarterly basis. By analyzing trended credit data, lenders can uncover valuable patterns in consumer credit behavior and emerging risks that often precede changes in credit scores [1].

TransUnion's findings underscore the importance of proactive risk management in the mortgage industry. By leveraging tools like TruVision for Managing Customer Portfolios, lenders can stay ahead of evolving consumer needs, identify behavioral patterns, predict future actions, and proactively diagnose account risks. This enables timely interventions to help mitigate rising delinquencies and potential losses [1].

References:
[1] https://www.stocktitan.net/news/TRU/trans-union-analysis-finds-rise-in-consumer-payment-to-income-ratios-bru2121zyuts.html