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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 34 November 2025 C O V E R S T O R Y homeowners' insurance premiums and property taxes are making it difficult for some homeowners to stay current on their monthly payments. While mort- gage delinquencies remain low, serious delinquency rates on mortgage loans have risen for four consecutive quar- ters, suggesting that borrowers who do become delinquent are having a harder time getting back on track. The FHA, whose loan portfolio accounts for over 50% of seriously delinquent mortgages, has tightened up its loss mitigation protocols, and we can expect a higher percentage of those past-due loans to become foreclosures in the months ahead. Context here is important: FHA loans only account for about 15% of all mortgages, and only about 4% of those are seriously delinquent. So, we'll see more foreclosure activity, but not in a huge way by any means. Q: Which macroeconomic indicators are you watching most closely right now as signals for housing direction? SHARGA: Jobs, jobs, and jobs. We have a very unusual labor market today: no one is hiring, and no one is firing (although we've seen more layoffs an- nounced recently). A strong jobs market is the No. 1 predictor of a strong housing market. More job creation generally means higher wages and more housing demand. A weaker job market, with higher unemployment, generally means more delinquencies and foreclosures, and fewer home sales. There's also demographics to con- sider. In 2024, almost five million young adults turned 35 in America, and we'll likely see similar results when 2025 num- bers are compiled. Normally, these young adults would be looking to buy homes, but they have opted to rent instead due to poor affordability. Most of the research suggests that the majority of these young adults still want to become homeowners and are just waiting for market conditions to improve. That should provide at least a bit of a tailwind for the housing market in the next few years. Q: How active do you expect institutional and individual investors to be in the single-family rental and distressed property space next year? SHARGA: Investors own 20% of the single-family homes in the country and accounted for 33% of all home purchas- es in the second quarter of 2025, so it's almost a certainty that they'll contin- ue to play a large role in the housing market—especially the single-family rental market. But there's a huge misper- ception about who these investors are: 91% of the investor-owned homes are held by mom-and-pop investors who hold 10 or fewer properties. The largest institutional investors—those who own over 1,000 units—account for less than 2% of investor-owned homes. And this cohort of large investors have been net sellers of homes for the last six consec- utive quarters. This doesn't mean that they're getting out of the single-family rental space, though; a lot of the larger players are redeploying their capital into build-to-rent communities. This means that they're no longer competing with small investors or traditional homebuy- ers for existing homes, and it means that they're actually adding much-needed rental inventory to the market. I think you'll continue to see all those trends— small investors buying and holding more properties, and larger investors selling existing homes and building new rental communities—through 2026. Q: What data signals or leading indicators are most useful today for spotting early shifts in market momentum? SHARGA: Pending home sales from the NAR and purchase loan applications from the MBA are usually very useful tools in terms of predicting near-term shifts in market momentum. Today's market is incredibly rate-sensitive, so following rising or falling mortgage rates can be an early indicator as well, and to anticipate the direction of those chang- ing rates, it helps to follow yields on Jobs, jobs, and jobs. We have a very unusual labor market today: no one is hiring, and no one is firing " —Rick Sharga, Founder & CEO, CJ Patrick Company