Mortgage delinquencies across US dipped to lowest in more than a decade: report

Properties in some stages of delinquency fell to 4.4% in September according to CoreLogic

(Credit: iStock)
(Credit: iStock)

Mortgage delinquencies across the U.S. in September fell to their lowest levels in 12 years, at a time when the housing market from coast to coast continues to show signs of cooling. Experts attributed it in part to an improved labor market.

Nationally, mortgages that were in some stages of delinquency fell to 4.4 percent in September, from 5 percent over the same period last year, according to a new report by CoreLogic. The figures were the latest available. One note of caution, according to the report, was the trend in high loan-to-value lending that was going on, which could lead to defaults if the economy turns sour.

In Miami, delinquencies of more than 30 days experienced the sharpest falloff, dipping to 6.1 percent from 9.6 percent last year. But that can be attributed in large part to hurricane-related events. Last year, Miami and Houston saw a spike in homeowners missing their payments because of storm-related costs.

In New York City, delinquencies dropped in September to 6 percent, from 6.9 percent the year before.

Chicago’s rate fell to 4.7 percent from 5.2 percent and in Los Angeles, delinquencies continued to creep down. They dropped to 2.7 percent, from 2.9 percent.

The data from CoreLogic signals at least some good news for the broader U.S. housing market, where recent reports have shown that home prices and sales have slowed from last year. Some homebuilders have also said they are expecting fewer new home deliveries in 2019.

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“Outside of areas affected by natural disasters, serious delinquency and foreclosure rates have declined steadily across the nation as the labor market has improved and home prices have risen,” said Frank Martell, president and CEO of CoreLogic.

The rate for early-stage delinquencies nationwide — defined as 30 to 59 days past due — was 2.2 percent in September, down from 2.4 percent from the previous year. Meanwhile, the foreclosure inventory rate — which measures the share of mortgages in some stage of the foreclosure process — was 0.5 percent in September, down 0.1 percent since September 2017.

CoreLogic’s report paints a far different picture from an analysis in July by Attom Data Solutions. That study showed 96 of 219 metropolitan areas — or 44 percent — posted year-over-year increases in foreclosure starts in July.

The two reports show the differences revealed in the U.S. housing and mortgage market when looking at one-month snapshots.

While CoreLogic’s most recent report shows an improving picture when it comes to the mortgage market, its CEO sounded a caution about related factors, including high loan-to-value and debt-to-income lending.

Martell said this kind of lending “heightens the risk of a significant upturn in loan default if the economy slips into recession or home prices decline.”