Mortgage Delinquency Rates Nearly Double What They Were a Year Ago

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The U.S. mortgage delinquency rate in September stood at 6.3%, up substantially since September 2019 when it was 3.8%, according to CoreLogic.

Still, overall delinquency rates have declined since the peak impact of the pandemic, seen in May.

Early-stage delinquencies (30 to 59 days past due) stood at 1.5% of all loans, down from 1.9% in September 2019, and down from 4.2% in April, when early-stage delinquencies spiked.

Mortgages that are 60 to 89 days past due represented 0.7% of all loans, up from 0.6% in September 2019, but down from the peak of 2.8% in May.

Serious delinquencies (90 days or more past due, including loans in foreclosure) represented 4.2% of all loans, up from 1.3% in September 2019 but down slightly from 4.3% in August.

“Although delinquencies remain high, it’s clear the economy has passed an initial stress test,” says Frank Martell, president and CEO of CoreLogic, in a statement. “High home equity balances and structural protections put in place as a result of the Great Recession contributed to surviving this test.”

“Housing demand remains strong, and rates low, which provides optimism that the housing market will continue to be a bright spot in this COVID-ravaged economy,” Martell says.

“Our analysis of CoreLogic public records shows that more than one-half of all home mortgage loans created since the onset of the pandemic have been no-cash-out refinance,” adds Frank Nothaft, chief economist at CoreLogic. “By reducing their mortgage rate with these types of loans, homeowners have been lowering both their interest expense and risk of delinquency.”

In September, every state logged an annual increase in overall delinquency rates.

For months, popular tourism destinations showed the highest increases, with Nevada (up 4.9 percentage points), Hawaii (up 4.7 percentage points) and Florida (up 4 percentage points) again topping the list for gains in September.

Similarly, nearly all U.S. metro areas logged an increase in overall delinquency rates in September.

Lake Charles, Louisiana — where Hurricane Laura hit in August — experienced the largest annual increase of 10.7 percentage points.

Other metro areas with significant overall delinquency increases included Odessa, Texas (up 10.3 percentage points), Midland, Texas (up 7.9 percentage points) and Kahului, Hawaii (up 7.5 percentage points).

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