Mortgage Delinquency Rate Moves Closer To Pre-Pandemic Levels

For the month of September, 3.9% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 2.4% decrease compared to September 2020, when it was 6.3%, according to CoreLogic's Loan Performance Insights report.

“Record home equity levels have been a boon to many homeowners navigating the cross-currents of the pandemic,” said Frank Martell, president and CEO of CoreLogic. “Not only have homeowners used this equity to fuel a record level of home improvements and renovation, it has proven to be a vital factor in helping families ward off foreclosure, pay down existing debt and weather changing market conditions.”

Home equity has been a redeeming factor for many homeowners who were on the verge of foreclosure. Despite nearly one-in-two delinquent borrowers being behind on their mortgages by six months or more, high levels of equity assure that relatively few of these borrowers will fall into foreclosure as they exit forbearance, according to the report.

The report also points to the U.S. unemployment rate, which continued to fall over the course of the year and in November 2021 was 4.2%, 10.6 percentage points lower than the rate in April 2020. Naturally, employment and income growth provide the means for borrowers to remain current on their mortgages.

“The economic recovery has pushed down the percent of delinquent borrowers to the lowest level since the pandemic began,” said Dr. Frank Nothaft, chief economist at CoreLogic. “The number of borrowers past due on their mortgage doubled between March and May 2020. The past-due rate in September 2021 was the lowest since March 2020.”