January Delinquency, Foreclosure Rates Lowest in 20 Years

CoreLogic, Irvine, Calif., said just 4 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in January, the lowest this century.

CoreLogic said delinquencies declined by 0.9 percentage points from a year ago, when it was 4.9 percent. The foreclosure inventory rate fell to 0.4 percent, down 0.2 percentage points from a year ago, tying November and December 2018 rates as the lowest for any month during the 2000s.

The report said the rate for early-stage delinquencies (30-59 days past due) fell to 1.9 percent in January, down from 2 percent a year ago. The share of mortgages 60-89 days past due in January fell to 0.7 percent, down from 0.8 percent a year ago. The serious delinquency rate (90 days or more past due, including loans in foreclosure) fell to 1.4 percent in January, down from 2.1 percent a year ago, the lowest for that month since 2001 and the lowest for any month since September 2006.

CoreLogic said the share of mortgages that transitioned from current to 30 days past due was unchanged from a year ago at 0.8 percent in January. 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.

“Income growth, home appreciation and sound underwriting combined have pushed delinquency rates to their lowest level in 20 years,” said Frank Nothaft, chief economist for CoreLogic. “The low delinquency rates on home mortgages are a contrast to the rising delinquency rates on consumer credit. While home mortgage delinquency rates are at, or are near, their lowest levels in two decades, delinquency rates for auto and student loans are higher now than they were during the early and mid-2000s.”

The report said the national delinquency rate has fallen on a year-over-year basis for the past 13 consecutive months. Fewer delinquencies attribute to the strength of loan vintages in the years since the residential lending market has recovered following the housing crisis. In January, 13 metropolitan areas experienced annual gains–mostly very small–in their serious delinquency rates. The largest gains were in five Southeast metros affected by natural disasters in 2018.

“As the economic expansion continues to create jobs and low mortgage rates support home buying this spring, delinquency rates are likely to trend lower during the coming year,” said Frank Martell, president and CEO of CoreLogic. “The decline in delinquency rates has occurred in nearly all parts of the nation.”