Roughly 4.3% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in June, a decrease of 0.3% compared with June 2017, according to CoreLogic’s Loan Performance Insights report.
Loans that were in the early-stage of delinquency – defined as 30 to 59 days past due – represented 2% of all mortgages, flat when compared with June 2017.
The share of mortgages that were 60 to 89 days past due was 0.6%, also flat compared with June 2017.
The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.7% in June, down from 1.9% a year earlier.
It was the lowest serious delinquency rate since 2007.
Florida and Texas were the only states to post annual gains in their serious delinquency rates, due in part to the fall storms.
As of the end of June, the national foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.5%, down 0.2 percentage points from 0.7% in June 2017.
It was the lowest foreclosure inventory rate since September 2006, when it was also 0.5%.
In a statement, Frank Nothaft, chief economist for CoreLogic, says the strong labor market is helping to drive delinquency and foreclosure rates to pre-crisis lows.
“A solid labor market enables more homeowners to remain current on their mortgage,” Nothaft says. “The national unemployment rate in June 2018 was four percent, the lowest for June in 18 years.
“While this has helped reduce delinquencies nationally, delinquency rates in areas hit by wildfires, hurricanes or other natural disasters have jumped as families deal with financial disruption and tragedy,” he adds. “The loss of housing and displacement of families also tends to drive up local rents and reduce vacancies.”
Also helping to drive down delinquencies and foreclosures in June was that Florida and Texas are now largely recovered from the hurricanes that struck the U.S. mainland last fall.
“Due to last year’s hurricane season, Florida and Texas experienced increases in serious delinquency rates over the past year,” says Frank Martell, president and CEO of CoreLogic. “Neighborhoods impacted by similar disasters in 2018 should also expect to see a spike in delinquencies in the coming year. With storms and wildfires currently impacting multiple areas of the country, homeowners, lenders and servicers should remain vigilant of potential impacts, particularly those in California, Hawaii and the Rocky Mountain and Gulf Coast states.”
CoreLogic recently released data showing that the storm surge from fast-approaching Hurricane Florence, which is expected to strike the East Coast on Thursday and Friday, threatens about 758,000 residential homes in North Carolina, South Carolina and Virginia with a reconstruction cost value of approximately $170.2 billion.
Current projections show it is likely Hurricane Florence could exceed a Category 4 storm.