Mortgage Delinquencies Fall to 10-Year Low
Mortgage delinquency rates for loans 30 days or more past due dropped to a 10-year low in August. The foreclosure rate dropped by a third year over year as well.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
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.
[nativounit]
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%).
[recirclink id=412795]
[wallst_email_signup]
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
