What poses the greatest threat to rising mortgage delinquencies in 2024?

Auction.com recently conducted a survey of default servicing leaders. They found that the primary concerns that rising delinquencies are increasing due to rising insurance and property taxes. 37% of respondents points to these hidden costs as being the #1 reason for delinquencies. This beat out any other factor.

Homeowner insurances rates have increased 19% since 2019.

Last year, Guaranteed Rate said insurance companies blamed changes in climate for increase in rates. They also called on companies to:

• Compare insurance rates
• Increase deductibles
• Bundle Home & Auto
• Ensure proper coverage limits
• Assess roof condition
• Reduce risk through smart technology
• Consider purchasing private flood insurance
• Proactively protect property
• Monitor credit rating
• Estimate insurance costs prior to purchasing a new home

Rising insurance and property tax rates are are also causing delinquencies in other areas. Rising consumer debt delinquencies are not that far behind with 32%. This is followed by rising unemployment at 15%. Commercial mortgage defaults are also contributing to delinquencies at 10% with falling home prices at 6%. The survey was conducted in April. Respondents included banks and nonbanks. In addition to mortgage asset owners and government-sponsored enterprises.

The survey comes as insurance costs for homeowners continue to rise. The escalating impacts of climate change on America’s housing market has government and industry raising alarm bells. 

These findings serve as an early warning of what could trigger more defaults in the future. Especially, if we continue to see more natural disaster events that put more upward pressure on home insurance rates.

Read More About The Mortgage And Housing Crisis On The Horizon On MFI-Miami.com.