The share of home mortgage loan payments that are 30 days or more past due fell from 4.7% in July 2017 to 4.1% in July 2018. The foreclosure inventory rate fell from 0.7% to 0.5% in the same period.
The share of mortgages that transitioned from current to 30 days past due was 0.8% in July 2018, down by 0.1 percentage point year over year. This year’s rate remains somewhat lower than the transition rate of 1.2% just before the housing crisis struck and well below the peak rate of 2.0% 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, declined from 2.1% to 1.9% year over year in July. The share of mortgages that were 60 to 89 days past due in July was 0.6%, down by 0.1 percentage point 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:
With the national unemployment rate remaining below 4 percent since July, further declines in U.S. delinquency rates are likely in coming months. The exception will be in local areas impacted by natural hazards or a rise in unemployment. The destruction of homes and disruption to local commerce caused by natural disasters lead to a subsequent spike in local delinquency rates, even for homes that were untouched.
Frank Martell, president and CEO of CoreLogic, added:
Despite an overall sunny picture of delinquencies, weather-driven hotspots dot the country. We expect higher delinquency rates in the mid-Atlantic region later this year due to Hurricane Florence, which impacted nearly half a million homes in North Carolina alone. We also see increases in serious delinquency rates in Florida and Texas reflecting the damage of Hurricanes Harvey and Irma. In addition, Hawaii will likely experience an increase in delinquency rates as a result of Hurricane Lane and the eruption of Kilauea.
The states with the lowest 30-plus delinquency rate in July 2018 were Colorado (1.9%), Oregon (2.0%), North Dakota (2.1%), Washington (2.1%) and Idaho (2.3%). The 30-plus delinquency rate was highest in Mississippi (8.0%), Louisiana (7.2%) and New York (6.2%).
Among the largest U.S. metro areas, the highest 30-plus delinquency rates in July were posted in Miami (6.5%) and Houston (5.9%). Among these large metro areas, the lowest rates were reported in San Francisco (1.5%) and Denver (1.8%).