Today’s release of CoreLogic’s monthly Loan Performance Insights Report for 2021 revealed that 4.2% of all mortgages were in some stage of delinquency, representing a 2-3 percentage point decrease compared to July 2020 when it was 6.5%. Still, this tops pre-pandemic rates when 3.6% of all mortgages were in some stage of delinquency.
The rate of early-stage-delinquencies (30 to 59 days past due) fell from 1.5% in July 2020 to 1.1% in July 2021. Meanwhile, adverse delinquencies (60 to 89 days past due) decreased from 1% to 0.3% year-over-year. Serious delinquencies (90 days or more past due, including loans in foreclosure) were down from 4.1% to 2.8%, marking the lowest serious delinquency rate since May 2020. Additionally, the transition rate (the share of mortgages that transitioned from current to 30 days past due) was also down from 0.8% to 0.6% year-over-year.
The foreclosure inventory rate (the share of mortgages in some stage of the foreclosure process) was down from 0.3% in July 2020 to 0.2% in July 2021, representing the lowest foreclosure inventory rate since CoreLogic began recording data in 1999.
“Declining delinquency levels are an encouraging sign of economic improvement and the durability of the housing market,” said Frank Martell, president and CEO of CoreLogic. “Looking ahead to the end of many forbearance and other assistance programs, many borrowers receiving support must consider their financial options, including a potential loan modification, to ensure they stay current and keep foreclosures at bay.”
Although the rate of serious delinquencies has been improving, there are still one million people nationwide who have not been able to make payments for half a year. The share of borrowers six months or more past due made up one-half of total delinquencies in July. Many are still leaning on options such as forbearance, loan modifications, and other government provision to keep themselves afloat.
Dr. Frank Nothaft, chief economist at CoreLogic, said, “Even if loan modification or income recovery is unable to help delinquent homeowners become and remain current on their payments, the double-digit rise in home prices may help them avoid a distressed sale. Homeowners with substantial home equity are far less likely to experience a foreclosure sale, and fortunately, the CoreLogic Home Equity Report found the average owner gained $51,500 in equity in the past year — a five-fold annual increase.”
All U.S. states recorded a decrease in annual overall delinquency rates. Regions with the largest declines were New Jersey (down 3.9%), Florida (down 3.5%) and Nevada (down 3.3%). Additionally, all U.S. metros logged a decrease in overall delinquency, with the largest declines coming from Miami (down 5.4%), Laredo, Texas (down 5.1%) and Kingston, New York (down 5%).
The next CoreLogic Loan Performance Insights Report will be released on November 9, 2021, featuring data for August 2021.
