CoreLogic: Mortgage Delinquencies at 23-Year Low

CoreLogic, Irvine, Calif., said mortgage delinquencies fell in January to their lowest level since 1999.

The company’s monthly Loan Performance Insights Report said 3.3% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure) in January, a 2.3 percentage point decrease from a year ago, when it was 5.6%, marking the lowest recorded overall delinquency rate in the U.S. since at least January 1999.

Other key findings:

–Early-Stage Delinquencies (30 to 59 days past due): 1.2%, down from 1.3% a year ago.

–Adverse Delinquency (60 to 89 days past due): 0.3%, down from 0.5% a year ago.

–Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.8%, down from 3.8% a year ago and a high of 4.3% in August 2020.

–Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.2%, down from 0.3% a year ago.

–Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.7%, unchanged from a year ago.

CoreLogic Chief Economist Frank Nothaft said the drop in the nation’s overall mortgage delinquency rate in January marked the 10th consecutive month of year-over-year declines. He attributed this to escalating home prices and a strong job market. U.S. home prices continue to reach new highs, posting 20% year-over-year growth in February. Meanwhile, the latest U.S. jobs report shows that the country added an average of 562,000 positions per month in the first quarter.

While the U.S. foreclosure rate declined compared to January 2021, the expiration of moratoriums in some states caused the number of foreclosures to rise from December 2021. Nevertheless, the January 2022 foreclosure rate was flat from December and is still the lowest recorded since at least 1999.

“The large rise in home prices — up 19% in January from one year earlier, according to CoreLogic indexes for the U.S. — has built home equity and is an important factor in the continuing low level of foreclosures,” Nothaft said. “Nonetheless, there are many homeowners that have faced financial hardships during the pandemic and are emerging from 18 months of forbearance. The U.S. may experience an uptick in distressed sales this year as some owners struggle to remain current after forbearance and loan modification.”

The report said all states logged year-over-year declines in their overall delinquency rate, with biggest declines in Nevada (down 3.7 percentage points), Hawaii (down 3.5 percentage points) and New Jersey (down 3.2 percentage points). The remaining states, including the District of Columbia, registered annual delinquency rate drops between 3.1 percentage points and 1.0 percentage points.

All U.S. metro areas posted at least a small annual decrease in overall delinquency rates, including those that were previously affected in the aftermath of Hurricane Ida last fall. Metros with the largest declines were Odessa, Texas (down 6.3 percentage points); Kahului-Wailuku-Lahaina, Hawaii (down 6.1 percentage points); Laredo, Texas (down 5.9 percentage points); and Lake Charles, La. (down 5.8 percentage points).