(Bloomberg) - The U.S. mortgage delinquency rate declined in the first quarter to the lowest level since 2008 as an improving job market helped more borrowers pay their bills and tighter lending standards resulted in fewer defaults.
The share of home loans at least 30 days late dropped to 7.4 percent from 7.58 percent in the previous three months, according to a report today from the Mortgage Bankers Association. The rate peaked at 10.1 percent in the first quarter of 2010 and was last lower in the third quarter of 2008, when it was 6.99 percent.
“Delinquencies are clearly continuing to improve,”Michael Fratantoni, the group’s vice president of research and economics, said in a statement. “Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future.”
Falling delinquencies may help limit foreclosures and solidify a recovery in the housing market as low interest ratescombine with decreased prices to stimulate demand. Housing affordability reached a new high in the first quarter and sales of previously owned homes rose 5.3 percent from a year earlier, data from the National Association of Realtors show.
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