CoreLogic: Mortgage Delinquency Rate Falls to New Low

MBA NewsLink Staff

CoreLogic, Irvine, Calif., said overall mortgage delinquencies fell to their lowest point yet amid improved employment and growing home equity.

The company’s monthly Loan Performance Insights Report said 3.4% of all mortgages in the U.S. were in some stage of delinquency in December (30 days or more past due, including those in foreclosure), a 2.4 percentage point decrease from a year ago, when it was 5.8%. This is the lowest recorded overall delinquency rate in the U.S. since at least January 1999.

Other findings:

–Early-Stage Delinquencies (30 to 59 days past due): 1.2%, down from 1.4% in December 2020.

–Adverse Delinquency (60 to 89 days past due): 0.3%, down from 0.5% in December 2020.

–Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.9%, down from 3.9% in December 2020 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% in December 2020. This is the lowest foreclosure rate recorded since at least January 1999.

–Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, down from 0.8% in December 2020.

CoreLogic Chief Economist Frank Nothaft noted the unemployment rate declined for the sixth straight month in December to the lowest since the beginning of the COVID-19 pandemic. Meanwhile, national home prices increased by 18.5 percent year over year, helping more owners regain equity. The combination of these dynamics pushed the overall mortgage delinquency and foreclosure rates to the lowest levels that CoreLogic has recorded in more than two decades.

“Nonfarm employment grew by 6.7 million workers during 2021, the largest one-year increase, supporting income growth and keeping more families current on their loans,” Nothaft said. “Nonetheless, places hit hard by natural disasters have experienced a spike in missed payments. Serious delinquency rates for December in the Houma-Thibodaux [La.] metro area were nearly two percentage points higher than immediately before Hurricane Ida.”

The report said every state logged year-over-year declines in their overall delinquency rate. States with the largest declines were Nevada (down 3.7 percentage points), Hawaii (down 3.5 percentage points), Florida (down 3.4 percentage points), New Jersey (down 3.3 percentage points) and New York (down 3.2 percentage points).

All but one U.S. metropolitan area posted at least a small annual decrease in the overall delinquency rate. The one area where delinquencies were unchanged in December was Houma-Thibodaux, which was impacted by Hurricane Ida in the fall. However, the report noted its overall December delinquency rate improved from October and November.