The U.S. housing market has finally emerged from the swell of serious mortgage delinquency triggered by the pandemic. The number of homeowners lagging three months or more on their mortgage payments plunged to its lowest since August 2006. As of June's end, 477,000 borrowers were still three or more payments in arrears but not in active foreclosure. This reflects a substantial reduction of 177,000 compared to the same period last year.
The national delinquency rate also continues its near-record-low streak, with June's figures marking the third-lowest level on record. This trend remains consistent despite minor monthly increases in early- and mid-stage delinquencies. Early-stage delinquencies, referring to borrowers 30 days late on their payments, saw an uptick of 19,000 (+2.2%), while those missing two payments (60 days past due) increased by 5,000 (+1.7%).
June also saw a slight rise in foreclosure starts, tallying 28,000 for the month. However, it's crucial to note that this figure is only 1% above the average for the preceding 12 months and remains 38% lower than June 2019's pre-pandemic level.
Foreclosure proceedings began on an equivalent of 5.8% of the existing serious delinquencies in June, a climb from May's 5.1%. Yet, it still lags three percentage points behind the start rate in May 2019, prior to the pandemic. Simultaneously, the total number of loans in active foreclosure declined by another 5,000 in June and continues to sit at 47,000 (-17%) below the March 2020 figure. Furthermore, June witnessed a 1.5% rise in foreclosure sales (completions) from May, reaching 6,900.
