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Mortgage Delinquencies Remain Low In July

Sep 29, 2023
Delinquencies in closed-end loans increased in last year’s third quarter, according to results from the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin
News Director

CoreLogic report shows a stable mortgage landscape, with overall delinquency and foreclosure rates nearing historic lows.

Pointing to information from July on mortgage delinquencies, CoreLogic, found a resilient mortgage market.

In July 2023, 2.7% of all U.S. mortgages were in some form of delinquency (overdue by 30 days or more, encompassing those under foreclosure). This signifies a decline of 0.3 percentage points from July 2022's 3% but an increment of 0.1% from June 2023.

A comprehensive snapshot of the mortgage landscape reveals:

  • Early-Stage Delinquencies (30-59 days overdue) stood at 1.3%, mirroring July 2022's figures.
  • Adverse Delinquency (60-89 days overdue) was at 0.4%, consistent with July 2022.
  • Serious Delinquency (overdue by 90 days or more, inclusive of foreclosures) was at 1%, dropping from 1.3% in July 2022 and a peak of 4.3% in August 2020.
  • The Foreclosure Inventory Rate was 0.3%, steady from July 2022.
  • The Transition Rate was 0.7%, unchanged from the previous year.

The overall health of the U.S. mortgage market appeared robust in July, with delinquency and foreclosure rates nearing all-time lows. Only Idaho registered a year-over-year increment in overall delinquencies, even though the rates remained relatively low. On the contrary, 16 metro regions observed minor annual upticks in delinquency, a reduction from the 31 metro areas that reported rises in the previous month. Given the hurricane season's progression, some U.S. regions might witness a surge in seasonal delinquencies into 2024.

“Overall U.S. mortgage delinquencies remained near a record low in July, with the share of homes entering that status or progressing to later stages either unchanged or lower,” said Molly Boesel, principal economist for CoreLogic. “Since most borrowers have substantial amounts of home equity, those who have locked in low mortgage rates that do enter later stages of delinquency will most likely not experience foreclosures.”

She added that while home equity gains have moderated, CoreLogic anticipates accelerating home price growth over the upcoming year. Consequently, borrowers are expected to continually amass equity, albeit at a gentler pace, Boessel said.

Further insights include:

  • Only Idaho marked a minor year-over-year surge in July's overall mortgage delinquency rates, with a rise of 0.1 percentage points. Arizona and Utah remained unchanged, while other states registered reductions ranging between 0.1 and 0.9 percentage points.
  • 16 U.S. metropolitan regions recorded annual increases in July's overall delinquency rates. Notably, Elkhart-Goshen, Indiana, and Punta Gorda, Florida, led the pack with 0.5 percentage point jumps, followed by Cape Coral-Fort Myers, Florida, with a 0.3 percentage point increase.
  • Two metro areas, Cape Coral-Fort Myers, Fla., and Punta Gorda, Fla., experienced a rise of 0.4 percentage points in serious delinquency rates in July.
About the author
Christine Stuart is the news director at NMP.
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