The share of home mortgage loan payments that are 30 days or more past due fell to 3.8% in July, remaining at its lowest level in more than 20 years. Month over month, the overall delinquency rate dipped by 0.2 percentage points, and it has declined by 0.3 points since July 2018. The foreclosure inventory rate fell from 0.5% to 0.4% year over year, again a 20-year low.
The foreclosure rate remains below the average pre-crisis level of 0.6%. The July percentage of delinquent loans peaked at 11.4% in 2010, and since March of 2018, the overall delinquency rate in each month has been lower than it was in the pre-housing-crisis period between 2000 and 2006, when the average was 4.7%.
CoreLogic reported the data in its Loan Performance Insights report for July published last week. Early-stage delinquencies, defined as 30 to 59 days past due, decreased from 1.9% to 1.8% year over year in July. The share of mortgages that were 60 to 89 days past due in July was 0.6%, 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.
The share of mortgages that transitioned from current to 30 days past due was 0.8% in May 2019, unchanged compared to a year ago. This year’s rate remains below the transition rate of 1.2% just before the housing crisis struck and well below the peak rate of 2% in November 2008.
Serious delinquency rates (defined as 90 days or more past due) fell from 1.6% in July 2018 to 1.3% this past July, below the average for the pre-crisis period of 2000 through 2006. Serious delinquency rates declined in 44 states during the month and remained unchanged in the others.
CoreLogic’s chief economist, Dr. Frank Nothaft, said, “Homeowners have seen a big rise in home equity, which lowers foreclosure risk because owners have more ‘skin in the game.’ Our latest Home Equity report found that between the first quarter of 2011 and the second quarter of 2019, average equity per borrower increased from $75,000 to $176,000 and rose $5,000 in the past year alone.”
Frank Martell, president and CEO of CoreLogic, added, “The fundamentals of the housing market remain very solid with foreclosure rates hitting lows not seen in over 20 years. We expect foreclosure rates may very well drift even lower in the months ahead as wage growth and lower mortgage rates provide support for homeownership.”
Mortgage rates on a 30-year fixed-rate loan rose to 3.79% on Tuesday as yields on the 10-year Treasury note increased slightly to 1.75%.
Among the nation’s largest cities, New York (5.1%) and Miami (5%) have the highest rate of mortgages at least 30 days past due. San Francisco had the lowest rate, 1.3%.
The states with the highest rates of mortgages at least 30 days past due are Mississippi, Louisiana, New York, Alabama and West Virginia, all with rates above 5%, compared to the national average of 3.6%. The states with the lowest rates of mortgages at least 30 days past due are North Dakota, Idaho, Washington, Oregon and Colorado, all with rates of around 2% or below.