CoreLogic: Foreclosure, delinquency rates sink to 12-year lows

The strong economy nudged serious delinquency rates lower

CoreLogic: Foreclosure, delinquency rates sink to 12-year lows

Foreclosure and delinquency rates improved in May amid a stronger economy and despite impacts from natural disasters, according to the Loan Performance Insights Report for the month released by CoreLogic.

CoreLogic found that 4.2% of mortgages were in some stage of delinquency in May. The delinquency rate, which represents mortgages 30 days or more past due including those in foreclosure, marked a 0.3-percentage-point decline from the 4.5% overall delinquency rate in May 2017.

The foreclosure inventory rate was 0.5% in May. The share of mortgages in some stage of the foreclosure process was down 0.2 percentage points from 0.7% in the year-ago period. The latest foreclosure inventory rate was the lowest for any month since September 2006, when it was also 0.5%, and it was the lowest for May since 2006.

Early-stage delinquencies were at a rate of 1.8% during the month, down from 1.9% in the same month 2017. The share of mortgages that were 60 to 89 days past due was 0.6%, remaining unchanged.

The serious delinquency rate was 1.8%, falling from 2% in May 2017 to the lowest level for the month since 2007, when it was 1.6%.

“While the strong economy has nudged serious delinquency rates to their lowest level in 12 years, areas hit by natural disasters have had increases,” CoreLogic Chief Economist Frank Nothaft said. “The tragic wildfires in the West will likely lead to a spike in delinquencies in hard-hit neighborhoods. As an example, the wildfire in Santa Rosa last year destroyed or severely damaged more than 5,000 homes. Delinquency rates rose in the aftermath, and in the ensuing months, we observed home-price growth accelerate and sales decline. We will likely see the same scenario unfold in fire-ravaged communities this year.”


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