CoreLogic’s monthly Loan Performance Insights Report for October 2021 shows that 3.8% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 2.3-percentage-point decrease compared to October 2020, when it was 6.1%.
In October 2021, the U.S. delinquency and transition rates, and their year-over-year changes, were 1.2%, down from 1.4% in October 2020, for early-stage delinquencies; 0.3% from 0.6% for adverse delinquency; and 2.2% from 4.1% for serious delinquency (including loans in foreclosure). The foreclosure inventory rate (the share of mortgages in some stage of the foreclosure process) was 0.2%, down from 0.3% in October 2020. This remains the lowest foreclosure rate recorded since 1999. In addition, the transition rate (the share of mortgages that transitioned from current to 30 days past due) was 0.7%, down from 0.8%.
“Improving economic security and the benefits of disciplined underwriting practices over the past decade are helping reduce or avoid mortgage delinquencies,” says Frank Martell, president and CEO of CoreLogic. “We expect to see delinquency trend down over the balance of this year as the economy continues to rebound from the pandemic, employment grows and high levels of fiscal and monetary stimulus continues.”
After over a year of trying conditions for borrowers, unemployment rates mark an improvement as data from the Bureau of Labor Statistics shows that by October 2021 an estimated 82% of the jobs lost in March and April 2020 were recovered, which translates to roughly 18.2 million Americans back at work. The combination of significant job market improvement, home equity increases and federal assistance programs have helped overall delinquency rates decline to 3.8%, which is close to the October 2019 rate of 3.7%.
“Economic recovery and loan modification have helped reduce the number of loans that were in serious delinquency by just over one million from the August 2021 peak,” states Dr. Frank Nothaft, chief economist at CoreLogic. “Nonetheless, there were about one-half million more loans in serious delinquency in October than at the start of the pandemic in March 2020.”
In October 2021, all states logged year over year declines in their overall delinquency rate. The states with the largest declines were Nevada (down 3.7 percentage points), Hawaii (down 3.6 percentage points) and Florida (down 3.5 percentage points).
All except two U.S. metropolitan areas posted at least a small annual decrease in their overall delinquency rate. The two areas with annual increases in October 2021 were in Louisiana: Houma-Thibodaux (up 3.4 percentage points) and Hammond (up 0.2 percentage points).
The next CoreLogic Loan Performance Insights Report will be released on February 8, 2022, featuring data for November 2021.
Read the full October 2021 report here.
