Mortgage delinquencies are rising as homeownership costs pile up

Rising property taxes, insurance payments and growing delinquencies are eroding the promise of long-term stability in homeownership, according to a new blog from Cotality.

The post revealed that across the country, more people are starting to fall behind on their mortgages due to the post-purchase costs. These include property taxes and homeowners insurance, both of which are rising faster than many homeowners can keep up with.

Cotality data from 2025 shows that while serious mortgage delinquencies, defined as homeowners who are 90 days or more past due on a payment, fell steadily for more than three years, the trend reversed in mid-2024.

The top three states with the highest year-over-year changes in their serious delinquency rates are Florida, South Carolina and Georgia, each of which have faced not only an uptick in delinquencies but also natural disasters and rising insurance costs.

In Florida, property taxes jumped nearly 50% over five years. Insurance costs, especially in areas at risk of hurricanes and floods, also climbed. As a result, the average escrow payment, which typically covers taxes and insurance, rose 62% in the past five years. Nationally, property tax bills are 15.4% higher than before the pandemic.

In South Carolina, 14 insurers ran out of funds between 2020 and 2023, resulting in elevated premiums. Georgia saw property taxes jump more than $700 on average in just five years. Median home prices are still below the national average in Georgia, but the gap is rapidly closing as prices there jumped 65% between 2019 and 2024.

While serious delinquencies are a category that should raise alarms, there are other signs that more Americans are slipping behind on payments.

In the first quarter of 2025, the average national property tax delinquency rate — meaning that homeowners were at least one month behind on payments — was at its highest point since 2018.

More than half of the states with the highest rates of property tax delinquency also had unemployment rates above the national average.

Mississippi, which has the highest overall property tax delinquency rate, also has the lowest median household income and is among the top 15 states at risk of storm surge damage from hurricanes, according to Cotality.

But not all loans are built the same in these scenarios. Government-backed loans like those from the Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA) come with tighter margins.

Cotality’s data shows that serious delinquency rates for FHA loans are five times higher than for conventional mortgages. Serious delinquencies for VA loans are 3.5 times higher than conventional alternatives.