CoreLogic: Lowest August Delinquency Rates in 20 Years

CoreLogic, Irvine, Calif., said just 3.7% of mortgages were in some stage of delinquency in August, down by 0.2 percent from a year ago to its lowest rate since 1999.

The company’s monthly Loan Performance Insights Report noted, whoever, that five states saw increases in delinquencies in August.

The report said the foreclosure inventory rate fell to 0.4 percent in August, tying the prior nine months as the lowest for any month since at least January 1999.

The rate for early-stage delinquencies (30-59 days past due) was unchanged at 1.8% in August from a year ago. The share of mortgages 60-89 days past due in August was also unchanged from a year ago at 0.6. The serious delinquency rate (90 days or more past due, including loans in foreclosure) fell to 1.3% in August, down from 1.5% a year ago and the lowest for the month of August since 2005. The serious delinquency rate has remained consistent since April.

CoreLogic said the share of mortgages that transitioned from current to 30 days past due was unchanged at 0.8% from 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%, while it peaked at 2% in November 2008.

The report said while the nation’s overall delinquency remains near the lowest level since at least 1999, five states posted small annual increases in overall delinquency rates in August: Iowa (0.2 percentage points), Minnesota (0.1 percentage points), Nebraska (0.1 percentage points), Wisconsin (0.1 percentage points) and Rhode Island (0.1 percentage points).

“Job loss can trigger a loan delinquency, especially for families with limited savings,” said CoreLogic Chief Econmist Frank Nothaft, “The rise in overall delinquency in Iowa, Minnesota, Nebraska and Wisconsin coincided with a rise in state unemployment rates between August 2018 and August 2019.”

(The Mortgage Bankers Association releases its Third Quarter National Delinquency Survey this Thursday, Nov. 14. The NDS, conducted since 1953, covers 38 million loans on one- to four- unit residential properties. Loans surveyed are reported by more than 100 lenders, including mortgage bank, commercial banks and thrifts. MBA NewsLink will provide coverage; MBA Vice President of Economic Analysis Marina Walsh will provide commentary).

CoreLogic reported 47 metropolitan areas recorded small annual increases in overall delinquency rates in August, with some of the highest gains in the Midwest and Southeast. Metros with the largest increases were Dubuque, Iowa (2.2 percentage points), Pine Bluff, Ark. (1.1 percent), Goldsboro, N.C. (0.6 percent) and Panama City, Fla. (0.5 percent).

While the nation’s serious delinquency rate remains near a record low, 19 metropolitan areas recorded small annual increases in their serious delinquency rates. Metros with the largest increases were Panama City, Fla. (0.9 percentage points), Jacksonville, N.C. (0.2 percentage points), Wilmington, North Carolina (0.2 percentage points) and Goldsboro, North Carolina (0.2 percent). The remaining 15 metro areas logged annual increases of 0.1 percentage point. 

“Delinquency rates are at 14-year lows, reflecting a decade of tight underwriting standards, the benefits of prolonged low interest rates and the improved balance sheets of many households across the country,” said CoreLogic President and CEO Frank Martell. “Despite this month’s near record-low serious delinquency rate, several metros in hurricane-ravaged areas of the Southeast have experienced higher delinquency rates of late.  We expect to see these metros to return to pre-disaster delinquency rates over the next several months.”