Fitch Ratings said a four basis point rise in Australia's mortgage arrears rate in the second quarter of 2016 - lifting the rate to 1.14 per cent - "comes as a surprise" given the strong economic environment, appreciating housing market, low interest rates and low-but-positive real wage growth.The increase, identified in Fitch's latest Dinkum RMBS Index report, shows arrears worsened by six basis points year-on-year - "mainly in the 90+ days bucket."  The rating agency attributed this to the "migration" of the 30-60 days arrears from 1Q16 into longer-dated delinquencies."Recent data indicates households that had financial difficulties in 1Q16 also had them in 2Q16," Fitch noted. These worsening arrears may be due to high underemployment, despite falling unemployment. Australia's unemployment rate was 5.8 per cent at 30 June 2016 (subsequently falling to 5.6 per cent in August 2016), which is one of the lowest rates of the previous three years. But the underemployment rate has slowly risen to reach 8.8 per cent in June 2016, a near record high. Underemployed workers are defined as part-time workers who want and are available for more hours of work than they currently have and full-time workers who worked part-time hours during the reference week for economic reasons, such as being stood down or insufficient work being available.A slowdown in the mining sector, which has spilled over into regional areas in Queensland, Western Australia and the Northern Territory may have also affected borrowers. Fitch expects 90+ days arrears to increase in these states.Tighter lending standards over the last year or so may have lowered households' borrowing capacity, but also contribute to increased mortgage market stability, should the economy start slowing.The trends hinted at in the Fitch report also line up with the continuing tilt into negative sentiment among small business owners disclosed by the Scottish Pacific SME Growth Index, and Roy Morgan's warning of an underlying breakout in mortgage stress among dual income households.