CoreLogic: December U.S. Delinquency Rate Lowest in 20 Years

CoreLogic, Irvine, Calif., reported just 3.7% of mortgages in some stage of delinquency in December, the lowest for a December in more than 20 years.

The company’s monthly Loan Performance Insights report said the December delinquency rate represented an 0.4 percentage point decline in the overall delinquency rate from a year ago, when it was 4.1%.

The foreclosure inventory rate was unchanged at 0.4% from a year ago, matching the past 13 months as the lowest for any month since at least January 1999.

The rate for early-stage delinquencies (30-59 days past due) fell to 1.8% in December, down from 2% a year ago. The share of mortgages 60-89 days past due in December fell to 0.6%, down from 0.7% a year ago. The serious delinquency rate (90 days or more past due, including loans in foreclosure) fell to 1.2% in December, down from 1.5% in December 2018., to the lowest serious delinquency rate since June 2000.

The report said the share of mortgages that transitioned from current to 30 days past due fell to 0.8% in December, down from 0.9% a year ago. By comparison, just before the start of the financial crisis in January 2007, the current-to-30-day transition rate was 1.2%, and peaked at 2% in November 2008.

“Home price growth quickened during the last few months of 2019, padding the home equity cushion for owners,” said Frank Nothaft, chief economist with CoreLogic. “[We] anticipate a further pickup in appreciation, adding to home-equity wealth for owners and lowering foreclosure risk.”

The report said no states posted a year-over-year increase in the overall delinquency rate in December. States that logged the largest annual decreases included North Carolina and Mississippi (both down 0.8 percentage points), South Carolina (down 0.7 percentage points), Louisiana, New York and Tennessee (all down 0.6 percentage points).

Thirteen metropolitan areas recorded small annual increases in overall delinquency rates. The largest annual increases were in Janesville-Beloit, Wis. (up 1.9 percentage points); Enid, Okla. (up 0.6 percentage points) and Pine Bluff, Ark. (up 0.6 percentage points). The other 10 metro areas experienced increases between 0.1 and 0.2 percentage points.

While the nation’s serious delinquency rate reached a near 20-year low in December, 16 metro areas recorded at least a small annual increase. Enid posted the largest increase (up 0.4 percentage points), followed by Pine Bluff (up 0.3 percentage points); Dubuque, Iowa (up 0.2 percentage points) and St. Joseph, Mo. (up 0.2 percentage points). The other 12 metro areas logged increases of 0.1 percentage points.

“The mortgage market had another solid year in 2019, and loan performance across the country continues to show improvement,” said Frank Martell, president and CEO of CoreLogic. “The longest economic expansion in history helped serious delinquency rates reach a 20-year low. As mortgage rates continue to fall in the wake of recent global events, we may see homeowners refinance into lower-monthly payments, or into shorter-term mortgages, which can further reduce delinquency and foreclosure risk.”