National rate belies a small increase in several high-unemployment and hurricane-affected states
Mortgage loan performance remains good on a national level with overall delinquencies and foreclosures both declining.
However, the latest Loan Performance Insights Report from CoreLogic reveals that there are small increases in several states, mostly driven by unemployment and hurricanes.
The firm’s data shows that the overall delinquency rate (mortgages 30 or more days past due or in foreclosure) nationally in August was 3.7%, a 0.2 percentage point decrease year-over-year. This was the lowest rate for any August in at least the last 20 years.
The foreclosure inventory rate (mortgages at some stage of the foreclosure process) was down 0.1 percentage points to 0.4%. That tied the prior nine months as the lowest for any month since at least January 1999.
There were small annual gains for Iowa (0.2 percentage points), Minnesota (0.1 percentage points), Nebraska (0.1 percentage points), Wisconsin (0.1 percentage points) and Rhode Island (0.1 percentage points).
“Job loss can trigger a loan delinquency, especially for families with limited savings,” said Dr. Frank Nothaft, chief economist at CoreLogic. “The rise in overall delinquency in Iowa, Minnesota, Nebraska and Wisconsin coincided with a rise in state unemployment rates between August 2018 and August 2019.”
There were small gains for 47 metro areas led by Dubuque, Iowa (2.2 percentage points), Pine Bluff, Arkansas (1.1 percentage points), Goldsboro, North Carolina (0.6 percentage points) and Panama City, Florida (0.5 percentage points).
Serious delinquencies
There was a decline in serious delinquencies (90+ days past due including loans in foreclosure), of 0.2 percentage points year-over-year to 1.3%.
But small increases were seen in 19 metro areas led by Panama City, Florida (0.9 percentage points), Jacksonville, North Carolina (0.2 percentage points), Wilmington, North Carolina (0.2 percentage points) and Goldsboro, North Carolina (0.2 percentage points).
The remaining 15 metro areas logged annual increases of 0.1 percentage point.
“Delinquency rates are at 14-year lows, reflecting a decade of tight underwriting standards, the benefits of prolonged low interest rates and the improved balance sheets of many households across the country,” said Frank Martell, president and CEO of CoreLogic. “Despite this month’s near record-low serious delinquency rate, several metros in hurricane-ravaged areas of the Southeast have experienced higher delinquency rates of late. We expect to see these metros to return to pre-disaster delinquency rates over the next several months.”
