Comparing the Prime and Subprime Mortgage Markets

In this Chicago Fed Letter, we analyze the different mortgage types (prime versus subprime) and products (adjustable-rate versus fixed-rate) to explain differences in mortgage delinquency rates over time and across the Seventh Federal Reserve District.1 In light of recent news reports about the problems in the subprime lending market, our purpose is to document the recent trends in mortgage lending and analyze the rising level of delinquencies in the subprime mortgage market.