Volume 235 | June 27, 2025

Guardian Asset Management

Weekly Newsletter

Guardian endeavors to provide you with the latest in housing, industry and market news from Washington D.C. and around the country. It is our goal as your industry partner to be informative, relative and topical.

Share of Seriously Underwater Mortgages

Increased in Q1

The share of residential properties where the homeowner is “seriously underwater” on their mortgage increased to to 2.8% of all loans in the first quarter, an increase of 0.4% compared with the fourth quarter, a report from ATTOM shows.

ATTOM defines “seriously underwater” as properties where the loan balance exceeds the market value by at least 25%.

Although there was a slight increase in the first quarter, ATTOM notes that the underwater mortgage rate has remained relatively flat since 2020. 

The top five states that had the highest rates of seriously underwater mortgages in the first quarter included Louisiana, where 10.5%, or one in every 10 mortgages are seriously underwater; followed by Kentucky (7.3%), Mississippi (6.6%), Arkansas (5.8%) and Iowa (5.7%),

States with the lowest rates of seriously underwater mortgages included New Hampshire (1.1%); Rhode Island (1.0%), Vermont (0.7%), Alaska (2.2%) and Virginia (2.0%).

Researchers Find 'Surprise'

in New Mortgage Delinquency Data

Early- and mid-stage mortgage delinquencies saw the biggest yearly increases among all credit products, a development Vantagescore deemed a "surprise", which "may be demonstrating early signs of borrower financial stress."

The share of mortgages 30-to-59 days behind on payments jumped to 1.03% in May from 0.92% during the same month a year earlier. Among all types of accounts 60-to-89 days past due, mortgage holders' share grew to 0.32% from 0.26% in May 2024. The increase in both stages exceeded the pace seen in all other types of loans monitored by the credit-scoring agency in its monthly gauge. 

Fannie Mae and Freddie Mac Privatization:

What It Means For homebuyers

When it comes to housing finance reform, few if any topics are more important than the future of Fannie Mae and Freddie Mac. These government-sponsored enterprises, or GSEs – which underpin nearly half of all U.S. mortgage loans – have long been the silent engines driving mortgage accessibility, affordability and market stability. Now, as the current administration revisits privatizing these institutions, the conversation is no longer theoretical and the implications for buyers, sellers and homeowners are impossible to ignore.

Mortgage delinquency rates unexpectedly rise in May

“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.”

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.

May home sales barely move as high mortgage rates, prices, weigh on housing market

Sales of previously occupied U.S. homes edged higher in May, as stubbornly high mortgage rates and rising prices made homebuying less affordable even as the inventory of properties on the market continued to increase.

Existing home sales rose 0.8% last month from April to a seasonally adjusted annual rate of 4.03 million units, the National Association of Realtors said Monday.

Sales fell 0.7% compared with May last year. The latest home sales fell topped the 3.95 million pace economists were expecting, according to FactSet.

“The sluggish sales activity one can attribute essentially to affordability,” said Lawrence Yun, NAR’s chief economist.

Home prices increased on an annual basis for the 23rd consecutive month, although the rate of growth continued to slow. The national median sales price rose 1.3% in May from a year earlier to $422,800, an all-time high for the month of May.

GSEs prevented 60K foreclosures in Q1 2025

Florida, California and Texas had the highest number of seriously delinquent loans at the end of March

Fannie Mae and Freddie Mac helped to prevent 60,592 foreclosures through various actions in the first quarter of 2025. Since being placed under federal conservatorship in September 2008, they’ve completed more than 7.1 million foreclosure prevention actions.

That’s according to the newest Foreclosure Prevention, Refinance and Federal Property Manager’s Report released Thursday by the Federal Housing Finance Agency (FHFA).

Of these actions, about 6.45 million have helped homeowners stay in their homes. That figure includes more than 2.76 million permanent loan modifications.