CoreLogic: Serious Mortgage Delinquency Rate Returns to Pre-Pandemic Low
CoreLogic, Irvine, Calif., said 2.8% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), a 1.2 percentage point decrease from 4% a year ago.
The company’s monthly Loan Performance Insights Report for August also said early stage delinquencies (30-59 days past due) rose to 1.2%, up from 1.1% a year ago. Other report findings:
—Adverse Delinquency (60 to 89 days past due): 0.3%, unchanged from a year ago.
—Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.2%, down from 2.6% 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): 0.3%, up from 0.2% a year ago.
—Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, unchanged from a year ago.
The report said borrowers classified as seriously delinquent (90 or more days late) on their mortgage payments in August dropped to the lowest level recorded since April 2020, while the overall delinquency rate remained near a record low. CoreLogic Principal Economist Molly Boesel said the U.S. unemployment rate has stayed below 4% since the beginning of 2022, and the still-healthy job market continues to help homeowners with a mortgage make payments on time.
However, Boesel noted as the cost of basic necessities mounts with rising inflation, mortgage delinquencies could increase in the coming months as more borrowers see their monthly household budgets stretched further.
“The share of U.S. borrowers who are six months or more late on their mortgage payments fell to a two-year low in August and was less than one-third of the pandemic high recorded in February 2021,” Boesel said. “Furthermore, the foreclosure rate remained near an all-time low, which indicates that borrowers who were moving out of late-stage delinquencies found alternatives to defaulting on their mortgages.”
Other report findings:
–All states posted annual declines in their overall delinquency rates. States with the largest declines were Hawaii, Nevada and New York (each down 2.1 percentage points). Remaining states, including the District of Columbia, registered annual delinquency rate drops between 2 percentage points and 0.3 percentage points.
–All but five U.S. metro areas posted at least a small annual decrease in overall delinquency rates, with increases in those metros ranging from 0.1 to 0.4 percentage points.
–All U.S. metro areas posted at least a small annual decrease in serious delinquency rates, with Odessa, Texas (down 4.4 percentage points), Laredo, Texas (down 3.3 percentage points) and Midland, Texas and Kahului-Wailuku-Lahaina, Hawaii (both down 3.2 percentage points) posting the largest decreases.