Economy

Home Mortgage Delinquencies at 5-Year High, Likely to Get Worse

The share of home mortgage loan payments that are 30 days or more past due jumped to 7.3% in May, the highest rate in more than five years. Month over month, the overall delinquency rate increased by 1.6 percentage points, and compared to May 2019, the percentage jumped by 3.7 points. The foreclosure inventory rate fell from 0.4% to 0.3% year over year, equal to the lowest rate since at least January 1999.

The foreclosure rate remains below the average pre-crisis level of 0.6%. 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 May, published Tuesday morning. Early-stage delinquencies, defined as 30 to 59 days past due, rose by 1.3 points year over year to 3.0% in the month. The share of mortgages that were 60 to 89 days past due in May jumped from 0.6% a month ago to 2.8%. 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 reached 2.2% in May, an increase of 1.4 percentage points compared to a year ago. This May transition rate is the highest CoreLogic since the prior peak of 2.0% was recorded in November 2008 at the beginning of the housing crisis.

Serious delinquency rates (defined as 90 days or more past due) rose from 1.3% in May 2019 to 1.5% this past May, the first year-over-year increase in nearly 10 years. Serious delinquency rates rose in 44 states during the month with only Maine posting a drop and five others had no change.

Frank Martell, president and CEO of CoreLogic, commented:

Government and industry relief programs have helped to cushion the initial financial blow of the pandemic for millions of U.S. homeowners. COVID-19 and the resulting pressures continue to influence the economic activity of many households. Barring additional intervention from the Federal and State governments, we are likely to see meaningful spikes in delinquencies over the short to medium term.

Among the nation’s largest cities, Miami (13.9%) and New York (about 12.1%) have the highest rate of mortgages at least 30 days past due. San Francisco had the lowest rate at 4.9%.

The states with the highest rates of mortgages at least 30 days past due are New York, New Jersey, Louisiana, Mississippi and Florida, all with rates of at around 10% or more, compared to the national average of around 7.5%. The states with the lowest rates of mortgages at least 30 days past due are Idaho, South Dakota, Wisconsin, Iowa and Montana all with rates of less than 4.5%.