Skip to main content

Mortgage Delinquencies Approach Pre-Pandemic Levels

Staff Writer
Oct 12, 2021

4.2% of all mortgages were in some stage of delinquency in July.

KEY TAKEAWAYS
  • 4.2% of all mortgages were in some stage of delinquency in July, a slight decrease compared to last year's 6.5%.
  • Serious delinquencies decreased 4.1% to 2.8% year-over-year, marking the lowest serious delinquency rate since May 2020.
  • The foreclosure inventory rate was down from 0.3% in July 2020 to 0.2% in July 2021 — the lowest foreclosure inventory rate since CoreLogic began recording data in 1999. 
  • 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.

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. 

 

About the author
Staff Writer
Katie Jensen is a staff writer at NMP.
Published
Oct 12, 2021
High Rates Dampen Builder Confidence

Builder confidence in the market for newly built single-family homes was 43 in June, down two points from May.

Jun 20, 2024
Mortgage Rates Fell For The Third Straight Week

The 30-year fixed-rate mortgage averaged 6.87%.

Jun 20, 2024
Housing Starts Hindered By Barriers To New Construction

Single-family building permits drop to lowest level in a year

Jun 20, 2024
Lack Of Financial Knowledge Leads Borrowers To Overpay

The Philadelphia Fed's study finds limited borrower sophistication may provide lenders with market power.

Jun 20, 2024
Home Price Appreciation 'Normalizing' Nationwide

First American Data & Analytics reports May home price index 5.9% higher YOY

Jun 20, 2024
Home Flipping Activity, Profits Rise During Q1 2024

The flipping rate rose for the second straight quarter while investment returns reached 30% nationwide.

Jun 20, 2024