Mortgage Delinquency Drops To 3.8% In October 2021 – NMP Skip to main content

Mortgage Delinquency Drops To 3.8% In October 2021

Navi Persaud
Jan 11, 2022

A new report reveals the mortgage delinquency rate fell to 3.8% in October 2021, marking the seventh consecutive month of declines.

KEY TAKEAWAYS
  • Early-stage delinquencies dipped slightly from 1.4% to 1.2% year-over-year.
  • Adverse delinquency was down to 0.3% from 0.6% year-over-year.
  • Serious delinquency was down to 2.2% from 4.1% year-over-year.

CoreLogic's latest Loan Performance Insights report reported that 3.8% of all mortgages in the U.S. were in some stage of delinquency for Oct. 2021, compared 6.1% in Oct. 2020.

Early-stage delinquencies dipped slightly from 1.4% to 1.2% year-over-year, adverse delinquency was down to 0.3% from 0.6% year-over-year, and serious delinquency was down to 2.2% from 4.1% year-over-year. 

Meanwhile, CoreLogic reported that foreclosures were slightly down moving to 0.2% from 0.3% a year ago. It also marked the lowest foreclosure rate recorded since 1999, according to the report

After over a year of trying conditions for borrowers, unemployment rates mark an improvement as data from the Bureau of Labor Statistics shows that by October 2021 an estimated 82% of the jobs lost in March and April 2020 were recovered, which translates to roughly 18.2 million Americans back at work, according to the report.

The combination of significant job market improvement, home equity increases, and federal assistance programs have helped overall delinquency rates decline to 3.8%, which is close to the October 2019 rate of 3.7%.

“Improving economic security and the benefits of disciplined underwriting practices over the past decade are helping reduce or avoid mortgage delinquencies,” said Frank Martell, president and CEO of CoreLogic. “We expect to see delinquency trend down over the balance of this year as the economy continues to rebound from the pandemic, employment grows and high levels of fiscal and monetary stimulus continues.”

“Economic recovery and loan modification have helped reduce the number of loans that were in serious delinquency by just over one million from the August 2021 peak,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Nonetheless, there were about one-half million more loans in serious delinquency in October than at the start of the pandemic in March 2020.”

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