Borrowers are increasingly keeping up with mortgage payments, but for how long?

The number of Americans who’re keeping up with their mortgage payments has hit a twenty-year high, according to data from the Mortgage Bankers Association.

The MBA notes that delinquency rates are a key measure of economic success, and are closely watched by economists. It says the last time that a significant number of borrowers stopped paying on time, it had a huge negative impact on the economy.

The data shows that borrowers with conventional mortgages are the most likely to pay on time, while those whose loans are backed by the Federal Housing Administration are three times more likely to pay late.

That could be because FHA borrowers tend to be in more difficult financial predicaments, with lower credit scores, higher debt-to-income ratios, and lower down payments. These factors all increase the risk of a borrower paying late. But even so, 91 percent of FHA borrowers still manage to pay on time.

As to why more Americans are paying their mortgages on time, one answer could be that they generally have more equity in their homes than in recent years. Many have paid down the mortgage, and price inflation has increased the value of their homes. In addition, homeowner equity stands are $1.5 trillion, which is the highest amount since records began.

Borrowers also face stricter federal underwriting rules that have been in place since 2010 and make it more difficult for less financially well off people to obtain a mortgage. These days, Fannie Mae and Freddie Mac require an average FICO score of 750, which is a lot higher than was necessary before the last financial crisis in the 2000s.

Still, “if the lending industry begins to relax underwriting standards in any significant way to dig deeper into the pool of riskier credit applicants to plump up their volume of home-purchase mortgages, it’s inevitable that delinquencies will rise,” stated Ken Harney, a syndicated real estate columnist for the Washington Post.

Harney’s warning may fall on deaf ears, however. Many lenders have already began to ease up on standards, with the average credit ratings of borrowers already on the decline according to a recent study by FICO. In addition, Fannie Mae has eased its rules on debt-to-income, and now allows ratios of up to 50 percent for mortgage approvals, compared to 45 percent before.

The FHA also has posted a decrease in average credit scores and is now approving debt-to-income ratios well above 50 percent.