A new report from CoreLogic found the overall delinquency rate for U.S. mortgages dropped to a record low of 2.6%, down from 2.7% in May 2022 and 2.8% in April 2023.
However, the data revealed pockets of concern. Early-stage delinquencies (30 to 59 days past due) rose to 1.3%, up from 1.1% a year ago. Adverse delinquencies (60 to 89 days past due) also rose slightly, hitting 0.4%, up from 0.3% in May 2022. On a positive note, serious delinquencies (90 days or more past due, including loans in foreclosure) declined to 1% from 1.3% in the same month last year.
Despite the rise in early-stage and adverse delinquencies, the foreclosure inventory rate and transition rate both held steady at 0.3% and 0.6%, respectively, the same as last year.
"May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit,” said Molly Boesel, principal economist at CoreLogic. “A very strong job market continues to help borrowers pay their mortgages on time."
Notably, 14 states and nearly 170 metropolitan areas saw overall delinquencies increase year over year in May. The states experiencing the most significant increases included Idaho, Indiana, Michigan, Mississippi, and Pennsylvania, all rising by 0.2 percentage points.
At the metropolitan level, the highest increase in overall year-over-year delinquency rates in May was recorded in Elkhart-Goshen, Indiana, and Punta Gorda, Florida, both up by 1 percentage point, followed by Cape Coral-Fort Myers, Florida, and Lubbock, Texas, both up by 0.9 percentage points.
Despite these pockets of increase, Boesel emphasized that the strong job market, which added nearly 25 million jobs since April 2020, is expected to keep overall mortgage performance healthy. The unemployment rate has remained between 3.4% and 3.7% over the past 16 months. She further noted that mortgage performance is projected to remain solid while the job market may slightly weaken over the next year.
