Mortgage Delinquencies Fall to 10-Year Low

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The share of home mortgage loan payments that are 30 days or more past due fell from 5.2% in August 2016 to 4.6% in August 2017. The foreclosure rate fell from 0.9% to 0.6% in the same period.

The share of mortgages that transitioned from current to 30 days past due was 0.9% in August 2017, flat compared with August 2016. This year’s rate is below the transition rate of 1.2% just before the housing crisis struck, and well below the peak rate of 2% in November 2008.

The data were reported Tuesday by CoreLogic in its Loan Performance Insights report. Early-stage delinquencies, defined as 30 to 59 days past due, were trending lower in August 2017 at 2.0%, compared with the year-ago rate of 2.1%. The share of mortgages that were 60 to 89 days past due in August 2017 was 0.7%, unchanged compared with last year’s rate. According to CoreLogic, measuring early-stage delinquency rates is important for analyzing the health of the mortgage market.

CoreLogic’s chief economist, Dr. Frank Nothaft, said:

The effect of the drop in crude oil prices since 2014 has taken a toll on mortgage loan performance in some markets. Crude oil prices this August were less than half their level three years ago. This has led to oil-related layoffs and an increase in loan delinquency rates in states like Alaska and in oil-centric metro areas like Houston.

Frank Martell, president and CEO of CoreLogic, added:

Serious delinquency and foreclosure rates are at their lowest levels in more than a decade, signaling the final stages of recovery in the U.S. housing market. As the construction and mortgage industries move forward, there needs to be not only a ramp up in homebuilding, but also a focus on maintaining prudent underwriting practices to avoid repeating past mistakes.

The states with the lowest 30-plus delinquency rate in August 2017 were North Dakota (2.0%), Colorado (2.1%) and Montana and Oregon (2.5%). The 30-plus delinquency rate was highest in Mississippi (8.4%), Louisiana (7.8%) and New Jersey and New York (7.0%).

The metro areas with the highest 30-plus delinquency rates in July were New York City (6.8%), Miami (6.3%) and Houston (6.2%). The metro areas with the lowest rates were San Francisco (1.8%), Denver (1.9%) and Los Angeles (2.8%).