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Mortgage-delinquency rate hits another historical low point


The latest iteration of CoreLogic’s Loan Performance Insights report revealed that the U.S. residential mortgage-delinquency rate is lower now than it has been in more than 20 years.

Piggy bank in front of houseThe rate of mortgages that were 30 days or more overdue this past April was 3.6%, down 0.7 percentage points from April 2018. The decrease extended a streak of declining year-over-year delinquency rates to 16 months, indicating that U.S. homeowners are increasingly strong at making on-time mortgage payments.

Other metrics also point to improving mortgage performance. The foreclosure inventory rate was down 0.4% in April, CoreLogic reported, a drop of 0.1 percentage points compared to April 2018. Loans that were at least 30 days past due, as a share of all mortgages, also was down year over year, sitting at 3.6% this past April after being at 4.3% in April 2018. 

The share of all mortgages that transitioned from current to 30 days past due went decreased year over year this past April from 0.8% to 0.7%. And the shares of mortgages transitioning to deeper states of delinquency dropped even more sharply. The percentage of loans that went from 30 to 60 days overdue decreased 1.5% year over year, while the percentage of loans that went from 60 to 90 days overdue fell 1.3%.

Every state saw a decrease in the serious-delinquency rate (90 days or more past due), while all but 10 of the country’s largest metropolitan areas saw their serious-delinquency rates either decrease or hold steady.

Corelogic chief economist Frank Nothaft attributed the historically low delinquency rate to several factors, including “a 50-year low in unemployment, rising home prices and responsible underwriting.”

The metro areas that had growth in serious-delinquency rate were, in many cases, recently struck by natural disasters. The serious-delinquency rate in Chico, California, for example, was 21% higher this past April than a year ago, Nothaft noted, as the community is rebuilding after the 2018 Camp Fire. Likewise, cities in hurricane-prone areas like Florida, Georgia and the Carolinas fell into the same category.

Natural disasters could play a part in delinquency rates shifting upward in other parts 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,” Martell said.


 

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