TransUnion: Mortgage Delinquency Rate Fell To 2.37% In Q4

The U.S. mortgage delinquency rate was about 2.37% of all loans in the fourth quarter – down from 3.29% in the fourth quarter of 2014, according to TransUnion.

That’s a year-over-year decrease of about 28%.

The average mortgage debt per borrower was about $189,707, up about 1.4% compared with $187,139 per borrower in the fourth quarter of 2014.

The rapid decrease in delinquency rate and increase in debt is a positive sign for the residential mortgage market, TransUnion says in its Q4 2015 Industry Insights Report, which also looks at credit cards and auto loans. However, energy price declines and a growing subprime borrowing pool is having some impact on credit and borrowing in some regions of the country.

“Overall, the consumer credit markets are performing well,” says Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “It is a positive sign that delinquency levels have remained relatively low despite more borrowers receiving credit.

“We have seen a continued rise in the proportion of nonprime borrowers in both the auto loan and credit card industries, and that is a likely driver for the uptick in delinquency among recently originated cohorts in those sectors,” Becker adds. “We also believe lower energy prices and the resulting job losses in energy-dependent markets have played some role in delinquency rates. Even so, that impact appears, at this point, to be localized, and mild in terms of national effect.”

States in which energy plays a major role in the economy saw their delinquency rates increase in the fourth quarter. In 2015, both credit card and auto loan delinquency rates experienced double-digit increases in energy-rich states, such as Louisiana, Oklahoma, North Dakota, Texas and West Virginia.

What’s more, the decrease in the mortgage delinquency rate in these states was not as rapid compared with the U.S. overall, TransUnion reports.

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