CoreLogic Says Mortgage Delinquency, Foreclosure Rates at 12-Year Low

CoreLogic, Irvine, Calif., said U.S. foreclosure and mortgage delinquency rates fell to 12-year lows in July.

The company’s monthly Loan Performance Insights Report said , nationally, 4.1 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in July, representing a 0.6 percentage point decline in the overall delinquency rate from a year ago (4.7 percent).

CoreLogic reported as of July, the foreclosure inventory rate–the share of mortgages in some stage of the foreclosure process–was 0.5 percent, down 0.2 percentage points from 0.7 percent a year ago and the lowest for a July since 2006. The July foreclosure inventory rate remained unchanged from April, May and June rates of this year.

The report said the rate for early-stage delinquencies (30-59 days past due) fell to 1.9 percent in July, down from 2.1 percent a year ago. Mortgages 60-89 days past due in July fell to 0.6 percent, down from 0.7 percent a year ago. The serious delinquency rate, defined as 90 days or more past due, including loans in foreclosure, fell to 1.6 percent in July, down from 1.9 percent a year ago, the lowest for July since 2006 when it was 1.4 percent and the lowest for any month since June 2007 when it was also 1.6 percent.

CoreLogic said mortgages that transitioned from current to 30 days past due fell to 0.8 percent in July 2018, down from 0.9 percent a year ago. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent, while it peaked in November 2008 at 2 percent.

“With the national unemployment rate remaining below 4 percent since July, further declines in U.S. delinquency rates are likely in coming months,” said Frank Nothaft, chief economist for CoreLogic. “The exception will be in local areas impacted by natural hazards or a rise in unemployment. The destruction of homes and disruption to local commerce caused by natural disasters lead to a subsequent spike in local delinquency rates, even for homes that were untouched.”

CoreLogic said while no state posted year-over-year increases in 30-plus-day delinquencies in July, several metropolitan areas in Florida and Texas recorded month-over-month increases. This indicates properties in North Carolina, South Carolina and Virginia that recently experienced damage from Hurricane Florence may be at risk for early-stage delinquency. CoreLogic identified thousands of homes in these three states that were impacted by wind and water damage from the storm.

“Despite an overall sunny picture of delinquencies, weather-driven hotspots dot the country,” said Frank Martell, president and CEO of CoreLogic. “We expect higher delinquency rates in the mid-Atlantic region later this year due to Hurricane Florence, which impacted nearly half a million homes in North Carolina alone. We also see increases in serious delinquency rates in Florida and Texas reflecting the damage of Hurricanes Harvey and Irma. In addition, Hawaii will likely experience an increase in delinquency rates as a result of Hurricane Lane and the eruption of Kilauea.”