CoreLogic: Mortgage Delinquency Rates Lowest in Decade

CoreLogic, Irvine, Calif., reported 5 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in September, an 0.2 percentage point year-over-year decline to the lowest level in more than 10 years.

The company’s monthly Loan Performance Insights Report noted, however, that early stage delinquencies rose by 0.3 percent in September, which it attributed to continued fallout from Hurricanes, Harvey, Irma and Maria.

The report said the foreclosure inventory rate fell to 0.6 percent, down from 0.8 percent a year ago. Both August and September of this year experienced the lowest foreclosure inventory rate since June 2007 when it was also 0.6 percent, and the September foreclosure inventory rate was the lowest for the month of September in 11 years when it was 0.5 percent in September 2006.

The report noted early-stage delinquencies, defined as 30-59 days past due, rose to 2.4 percent in September, up 0.3 percentage points from 2.1 percent a year ago. The share of mortgages 60-89 days past due in September was unchanged at 0.7 percent. The serious delinquency rate (90 days or more past due) declined by 0.4 percentage points year over year to 1.9 percent in September. The 1.9 percent serious delinquency rate in June, July, August and September of this year marks the lowest level for any month since October 2007 when it was also 1.9 percent, and is also the lowest for the month of September since 2007 when the serious delinquency rate was 1.8 percent.

“September’s early-stage delinquency rate…does not reflect a deterioration in credit, but rather the impact of the hurricanes in Texas, Florida and Puerto Rico,” said Frank Nothaft, chief economist for CoreLogic. “September’s early-stage delinquency transition rate rose to 2.6 percent in Texas and it rose to 3.2 percent in Florida, which is higher than the 1 percent that’s typical for both states. Texas and Florida’s early-stage delinquency transition rates in September are much lower than New Orleans in September 2005 when the transition rate reached 17.4 percent as a result of Hurricane Katrina.”

“While natural hazard risk was elevated in 2017, the economic fundamentals that drive mortgage credit performance are the best in two decades,” said Frank Martell, president and CEO of CoreLogic. “The combination of strong job growth, low unemployment rates, steady economic performance and prudent underwriting has led to continued improvement in mortgage performance heading into next year.”