These 5 states led annual declines in the delinquency rate

by Steve Randall10 Dec 2019

Mortgage delinquencies continued their downward trajectory in September according to new data from CoreLogic.

The firm’s monthly Loan Performance Insights Report shows that the nationally 3.8% of mortgages were at some stage of delinquency (30 days or more past due including those in foreclosure); that’s 0.6 percentage point decline from a year earlier.

Meanwhile, the foreclosure inventory rate –the share of mortgages in some stage of the foreclosure process – was 0.4%, down 0.1 percentage points from a year earlier and maintaining the 10-month record as the lowest for any month since at least January 1999.

“The strong labor market in the United States along with continued prudent underwriting practices for mortgage origination have combined to power favorable loan performance over the past few years,” said Frank Martell, president and CEO of CoreLogic. “Unemployment reached a 50-year low in September 2019, which helped push annual delinquency rates downward for the 21st consecutive month and we expect this trend to continue as we enter into the new year.”

No states posted an annual increase and among those that posted declines, the largest were seen in Mississippi (-1.1 percentage points), North Carolina (-1.1 percentage points), Louisiana (-1.0 percentage points), New Jersey (-1.0 percentage points) and South Carolina (-1.0 percentage points).

Early stage, transition
The early stage delinquency (30-59 days past due) rate was 1.9%, down from 2.2% a year earlier; and the serious delinquency rate (90+ days past due or in foreclosure) was 1.3%, down from 1.5% in September 2018.

The share of mortgages that transitioned from current to 30 days past due was 0.8% in September 2019, marking a 0.4% decline compared to September 2018 when the transition rate stood at 1.2%.

“The decline in delinquency rates in North and South Carolina compared with a year ago reflect the recovery from Hurricanes Florence and Michael, which hit in the autumn of 2018,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Shortly after a natural disaster, we tend to see a spike in delinquency rates. Depending on the extent of devastation, serious delinquency rates generally return to their pre-disaster levels within a year.”

 


More market update: