CoreLogic report reveals why
Mortgage delinquency rates saw new record lows in August, with all states posting annual declines in their overall delinquencies.
About 2.8% of all home loans in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), according to CoreLogic’s latest report. This represents a 1.2% drop from a year ago.
Early-stage (30 to 59 days past due) and adverse delinquencies (60 to 89 days past due) remained relatively unchanged at 1.2% and 0.3% year over year, respectively. Meanwhile, the serious delinquency rate fell to 1.2%, down from 2.6% last year and a pandemic-high of 4.3%.
“The share of U.S. borrowers who are six months or more late on their mortgage payments fell to a two-year low in August and was less than one-third of the pandemic high recorded in February 2021,” said CoreLogic principal economist Molly Boesel.
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The share of mortgages in some stage of the foreclosure process increased slightly from 0.2% to 0.3% year over year. Transition rate, or the percentage of loans that transitioned from current to 30 days past due, stayed unmoved at 0.6%.
“Furthermore, the foreclosure rate remained near an all-time low, which indicates that borrowers who were moving out of late-stage delinquencies found alternatives to defaulting on their mortgages,” Boesel added.
“The US unemployment rate has stayed below 4% since the beginning of 2022, and the still-healthy job market continues to help homeowners with a mortgage make payments on time,” CoreLogic noted in its report. “However, as the cost of basic necessities mounts with rising inflation, mortgage delinquencies could increase in the coming months as more borrowers see their monthly household budgets stretched further.”
The states with the largest declines were Hawaii, Nevada and New York (all down 2.1%). The remaining states, including the District of Columbia, registered annual delinquency rate decreases between 0.3% and 2%.