There was a further reduction in the national mortgage delinquency rate in July, the latest month covered by the CoreLogic Loan Performance Insights Report.
The 0.3 percentage point decline year-over-year to 3.8% continues the trend of the lowest delinquency rate in at least 20 years and the share of mortgages that were in some stage of the foreclosure process was at a 14-year low for a July (0.4%) after falling 0.1 percentage points year-over-year.
“Homeowners have seen a big rise in home equity, which lowers foreclosure risk because owners have more ‘skin in the game,’” said Dr. Frank Nothaft, chief economist at CoreLogic. “Our latest Home Equity report found that between the first quarter of 2011 and the second quarter of 2019, average equity per borrower increased from $75,000 to $176,000 and rose $5,000 in the past year alone.”
The share of serious delinquencies (90+ days past current) was also at a 14-year low while the share of mortgages that transitioned from current to 30 days past due was 0.8% in July 2019, unchanged from July 2018.
“The fundamentals of the housing market remain very solid with foreclosure rates hitting lows not seen in over 20 years,” said Frank Martell, president and CEO of CoreLogic. “We expect foreclosure rates may very well drift even lower in the months ahead as wage growth and lower mortgage rates provide support for homeownership.”
But there were some exceptions
Four states posted small annual increases in overall delinquency rates in July: Vermont (0.5 percentage points), New Hampshire (0.2 percentage points), Iowa (0.1 percentage points) and Minnesota (0.1 percentage points).
Three of the four were among five states that posted small annual gains in the share of mortgages that transitioned from current-to-30-days past due in July: Vermont (0.3 percentage points), New Hampshire (0.1 percentage points), Iowa (0.1 percentage points), Wisconsin (0.1 percentage points) and Florida (0.1 percentage points).
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