CoreLogic: Mortgage Delinquencies Reach 20-Year Low

CoreLogic, Irvine, Calif., said April mortgage delinquencies and foreclosure inventories fell to their lowest rates in more than 20 years.

The company’s monthly Loan Performance Insights Report said nationally, 3.6% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in April, representing a 0.7 percentage point decline in the overall delinquency rate from a year ago, when it was 4.3%. This was the lowest rate for any month in more than 20 years and marked the 16th consecutive month of declines.

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

CoreLogic said the rate for early-stage delinquencies (30-59 days past due) fell 1.7% in April, down from 1.8% a year ago. The share of mortgages 60-89 days past due was unchanged in April at 0.6%, from a year ago. The serious delinquency rate (90 days or more past due, including loans in foreclosure) fell to 1.3% in April, down from 1.9% a year ago. April’s serious delinquency rate of 1.3% was the lowest for any month since August 2005.

The report said the share of mortgages that transitioned from current to 30 days past due fell to 0.7% in April, down from 0.8% 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 in November 2008 at 2%.

At the state level, only Nebraska’s overall delinquency rate was unchanged from a year earlier; all other states posted at least a small annual decline. But CoreLogic Chief Economists Frank Nothaft said a number of metros that suffered a natural disaster or economic decline contradict this national trend. For example, he said, in the wake of the 2018 California Camp Fire, the serious delinquency rate in the Chico, Calif. metro area this April was 21% higher than one year ago. The report said 10 metropolitan areas logged an increase in the serious delinquency rate. The highest gains continue to plague the hurricane-ravaged parts of the Southeast (in Florida, Georgia and North Carolina), and in northern California where the Camp Fire devastated communities in 2018.

“The U.S. has experienced 16 consecutive months of falling overall delinquency rates, but it has not been a steady decline across all areas of the country,” said Frank Martell, president and CEO of CoreLogic. “Recent flooding in the Midwest could elevate delinquency rates in hard-hit areas, similar to what we see after a hurricane.”