CoreLogic: September Mortgage Delinquency Rate Lowest in 20 Years

CoreLogic, Irvine, Calif., released its monthly Loan Performance Insights Report, showing 3.8% of mortgages were in some stage of delinquency in September, an 0.6 percentage point decline from a year ago.

The report said the foreclosure inventory rate fell to 0.4%, down 0.1 percentage points from a year ago, tying the prior 10 months as the lowest for any month since January 1999.

CoreLogic said the rate for early-stage delinquencies (30-59 days past due) fell to 1.9% in September, down from 2.2% a year ago. The share of mortgages 60-89 days past due in September 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 1.3% in September, down from 1.5% a year ago. The serious delinquency rate has remained consistent since April.

The report said the share of mortgages that transitioned from current to 30 days past due fell to 0.8% in September, an 0.4% decline 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 decline in delinquency rates in North and South Carolina compared with a year ago reflect the recovery from Hurricanes Florence and Michael, which hit in the autumn of 2018,” said Frank Nothaft, chief economist with CoreLogic. “Shortly after a natural disaster, we tend to see a spike in delinquency rates. Depending on the extent of devastation, serious delinquency rates generally return to their pre-disaster levels within a year.”

CoreLogic said no states posted a year-over-year increase in the overall delinquency rate in September. States that logged the largest annual decreases included Mississippi (-1.1 percentage points), North Carolina (-1.1 percentage points), Louisiana (-1.0 percentage points), New Jersey (-1.0 percentage points) and South Carolina (-1.0 percentage points).

In September, four metropolitan areas in the Midwest and Southeast recorded small annual increases in overall delinquency rates: Dubuque, Iowa (0.8 percentage points), Pine Bluff, Ark. (0.6 percentage points), Dalton, Ga. (0.2 percentage points) and Eau Claire, Wis. (0.1 percentage points).

The report said while the nation’s serious delinquency rate remains at a 14-year low, 14 metropolitan areas recorded small annual increases in their serious delinquency rates. Metros that saw the largest increases were Panama City, Fla. (0.7 percentage points), Dubuque, Iowa (0.2 percentage points) and Pittsfield, Mass. (0.2 percentage points). The remaining 11 metro areas each logged an annual increase of 0.1 percentage point. 

“The strong labor market in the United States along with continued prudent underwriting practices for mortgage origination have combined to power favorable loan performance over the past few years,” said Frank Martell, president and CEO of CoreLogic. “Unemployment reached a 50-year low in September 2019, which helped push annual delinquency rates downward for the 21st consecutive month and we expect this trend to continue as we enter into the new year.”