CoreLogic: Mortgage Delinquency Rate Lowest in a Decade

The mortgage delinquency rate (60 days or more past due) hit yet another post-crisis low in August, falling to just 4.6% of all mortgages nationwide, according to CoreLogic.

That’s the lowest delinquency rate in more than a decade, according to the software, data and analytics firm’s monthly Loan Performance Insights Report.

The U.S. delinquency rate for residential mortgages was down 0.6 percentage points compared with August 2016.

The improvement is due to stricter underwriting standards, as well as an improving economy.

The serious delinquency rate (mortgages that are 90 days or more past due) also fell – dropping 0.5 percentage points year-over-year .

In addition, the foreclosure inventory rate – which is the pipeline of homes that are somewhere in the foreclosure process – stood at 0.6% as of the end of August, down from 0.9% in August 2016 to reach the lowest level since August 2006, when it was 0.5%.

The report also measures early-stage delinquency rates, which CoreLogic claims is important for analyzing the health of the mortgage market. It also looks at transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

“The effect of the drop in crude oil prices since 2014 has taken a toll on mortgage loan performance in some markets,” says Frank Nothaft, chief economist for CoreLogic, in a statement. “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.”

The share of mortgages that transitioned from current to 30 days past due was 0.9% in August, unchanged from August 2016.

By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2%, and it peaked in November 2008 at 2%.

“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,” says Frank Martell, president and CEO of CoreLogic. “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.”


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