The Federal Reserve Bank of New York's latest Household Debt and Credit Report indicates a troubling uptick in housing foreclosure rates, nearing pre-pandemic levels. Q1 2025 saw foreclosures increase post-moratorium on VA-backed loans. While mortgage delinquencies remain lower than in 2019, surges in student loan delinquencies may hurt superprime borrowers' credit scores, potentially impacting their housing market accessibility. Ongoing trends suggest increasing distress, with a key question being whether foreclosures will continue to escalate through 2025 and 2026.
According to the New York Fed, superprime U.S. borrowers-those with credit scores above 760-who carry unpaid student loan balances are expected to see their credit scores drop by an average of 171 points this spring.
The most noticeable development this quarter is that student loan delinquencies surged to a five-year high in early 2025.
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