Geographic differences in mortgage delinquency rates reveal more about the impact of state-level living costs. The most telling data is not the proportion of mortgages with late payment notices attached, but how quickly that number is increasing, based on a WalletHub report published in May 2026 that compares rates from Q1 this year with Q4 of 2025. The following analysis from Offerpad, a real estate technology company, examines states experiencing the sharpest rise in mortgage delinquency rates and discusses the factors that explain the data.
While it covers a large area, Idaho’s population is widely dispersed and totals fewer than 2 million.
In terms of the share of mortgage loans that were delinquent in the first quarter of 2026, Idaho’s rate was 6.12%, according to the WalletHub data. That’s far lower than Arkansas, a similarly rural state, where delinquency rates were 11.28%. However, Idaho’s quarterly change in the proportion of people missing payments on home loans was 2.83% higher, whereas Arkansas’s was 1.34% lower quarter-on-quarter.
Regarding the causes of this rise, there are several factors to consider. Idaho’s faster-than-average increase in house prices in recent years, driven in part by a post-pandemic influx of new residents from places like California and Washington seeking lower living and property costs, has not been matched by an equivalent increase in average wages.
So, people who bought when the market peaked have been put under even more financial pressure in the years since, with budgets squeezed by inflation and high-interest, long-term mortgages of 30-plus years compounding their problems. It’s the same story in many other small, superficially affordable states in this list.
In Texas, the share of average mortgage loans delinquent in Q1 of 2026 was 9.44%. The quarter-on-quarter change of 2.97% puts it almost on par with Idaho. However, the reasons differ.
Aside from inflation, the state’s rising property taxes, which grew by $2.7 billion in 2025, are cited as a key concern. Texas’s attorney general, Ken Paxton, has even been prompted to write to cities across the state to remind them of a law passed last year that prohibits property tax increases.
Just 5.02% of mortgage holders in Colorado were delinquent on their payments in Q1 2026. However, the 3.29% quarter-to-quarter rise in this figure suggests many more households will soon be in the same situation.
One distinct cause here is the situation Colorado’s tech sector finds itself in. Accounting for a tenth of all employment state-wide, and a fifth of its GDP, any disruption here has broad economic consequences, including in housing affordability. This year has seen an exodus of tech companies from Colorado, with Palantir among the most prominent losses, and issues over operating costs and tighter regulations are cited.
With 6.25% of mortgage loans delinquent, representing a 3.30% quarterly rise, New Hampshire is a well-heeled state with a housing crisis looming. Indeed, persistent inflation, high utility costs, and rising municipal property tax reassessments have depleted household savings accumulated during 2020-2021 for median earners across New England. Homeowners who locked in deals that have become unaffordable are prioritizing soaring grocery and fuel costs over repaying their mortgages.
Facing the same woes as New Hampshire, Connecticut has an 8.00% mortgage delinquency rate, up by a similar 3.38% to its neighbor to the north, per the WalletHub report. Already a relatively expensive place to buy a home and live day-to-day, the economic and political uncertainty present nationwide is felt especially acutely here.
Sitting at 5.33%, Montana’s share of home loans that classify as delinquent is not the worst in the Mountain states, but the 3.71% rise quarter-on-quarter indicates emerging pressure. Once more, the spike in out-of-state buyers that was precipitated by the pandemic meant that average house prices ballooned. Inadequate wage increases and an already modest baseline increase financial pressure on household finances, leading to the expected rise in mortgage delinquency rates.
As the country’s third most populous state, Florida’s mortgage delinquency statistics matter more than most. In Q1 2026, 7.05% of home loans in the Sunshine State had late payments reported to credit agencies. This was 3.87% higher than in Q4 2025.
Home insurance costs are frequently cited by industry observers as a key driver of this trend, and that’s not surprising given the state’s exposure to extreme weather events that regularly cause billions in damage to homes. Similarly, rising levels of household debt and an overabundance of sellers relative to buyers exert serious financial strain on many Floridian households.
No state can match Louisiana when it comes to the sheer proportion of mortgages with delinquent payments reported, with this rate at 14.33% in Q1 2026. A double-digit issue like this looks set to get worse, with a quarter-on-quarter rise in the mortgage delinquency rate of 4.40%.
Like Florida, the state faces climate-related natural disasters, which in turn means home insurance costs are among the highest nationwide. Additionally, there is a cycle of missed payments that perpetuates mortgage delinquency, since once borrowers fall behind, it is increasingly difficult for them to catch up. Wage stagnation and rising living costs are also contributing factors, as in many other places mentioned earlier.
The story of Delaware’s 6.92% quarter-on-quarter rise in mortgage delinquency rates, with the proportion now pegged at 8.35%, mirrors what’s happening elsewhere. Recent county-level property reassessments have increased the taxable value of homes, directly raising monthly requirements. There may be fewer homes in the state than in major population centers like Florida, but borrowers already at the upper limit of their debt-to-income ratios are finding they cannot absorb these increased housing costs, so the outcome is identical.
Per the WalletHub report, Vermont tops the list with a 12.32% increase in mortgage delinquency rates. Only 5.81% of home loans in the state fall into this category.
The explanation is relatively simple: While the state’s economy is comparatively modest, its tax rates and living costs are at the upper end of the national spectrum. So, when inflation increases, households here have a higher chance of being exposed to rises that exceed household budgets.
While absolute delinquency rates remain manageable in most states, the rapid quarterly increases across 10 states signal emerging financial stress. Monitoring these trends is essential for policymakers and lenders tracking housing market stability.
This story was produced by Offerpad and reviewed and distributed by Stacker.