If you’ve been following the Phoenix real estate market, you’ve probably noticed a lot of talk about inventory, home prices, and interest rates. But there’s another piece of the puzzle that gives us a good feel for where the market might be headed: mortgage delinquencies.
What’s Really Happening With Mortgage Delinquencies
In simple terms, a mortgage becomes “delinquent” when a homeowner falls behind on payments. Here in Phoenix, we’ve seen a small uptick compared to last year, but overall, delinquency rates are still very low. That’s good news because it tells us that most homeowners are staying on top of their mortgages, even with the higher costs of living and today’s interest rates.
Nationally, delinquency rates have crept up from the rock-bottom lows we saw during the pandemic, but Phoenix continues to look strong compared to many other big metro areas. In other words, we’re not seeing signs of widespread distress.
Should We Worry About More Foreclosures?
It’s true that delinquencies often come before foreclosures, so it’s worth paying attention. But the situation today is very different from what we saw back in 2008. Most homeowners in Phoenix have built a lot of equity, thanks to years of rising home values. That equity gives people options. If someone runs into financial trouble, they can often refinance or sell, rather than lose their home to foreclosure.
On top of that, lending standards have been much stricter in recent years, which means homeowners are generally in stronger financial positions. So while we may see some increases in foreclosure activity, there’s no indication of a major wave ahead.
How This Fits Into the Phoenix Housing Market
Even with a healthy mortgage picture, affordability is still a big challenge in our market. Inventory has ticked up a bit, which gives buyers more choices, but many households are still spending a large share of their income on housing. That’s something to keep an eye on, because when budgets are stretched, even small changes in the economy can create stress.
What This Means for You
- If you’re buying: The low level of delinquencies means the market isn’t being flooded with distressed properties. That keeps home values more stable.
- If you’re selling: Limited foreclosure activity helps support pricing. Even with more listings available, you’re not competing against a wave of discounted homes.
- If you’re investing: Watching delinquency data can help you spot neighborhoods where households may be under more financial pressure. That can highlight opportunities, but it can also signal risk.
The Bottom Line
Right now in Phoenix, foreclosure risk remains low. Yes, delinquencies are nudging up a little, but overall, most homeowners are in a solid position. The bigger story in our market continues to be affordability and inventory, not foreclosures. Still, keeping an eye on delinquency trends is smart, because they’re one of the earliest indicators of where things might head next.