National delinquency rate lowest for an October in 20 years

A new CoreLogic report found that 3.7% of U.S. residential mortgages were in some stage of delinquency this past October — the lowest rate for that month in nearly 20 years.

The overall delinquency rate, measured by loans that are at least 30 days past due, fell 0.4 percentage points compared to October 2018, when it was 4.1%. Historically, the share of delinquent mortgages during October peaked in 2010 at 11.5%.

Moreover, both the serious delinquency rate and the foreclosure inventory rate have flattened out at historically low levels. The serious delinquency rate — defined as the share of loans 90 days or more past due, including loans in foreclosure — was 1.3% in October, down from 1.5% in October 2018. On a monthly basis, the serious delinquency rate was unchanged from September 2019 and has remained flat at 1.3% since this past April.

The foreclosure inventory rate — defined as the share of mortgages in some stage of the foreclosure process — was 0.4% this past October. That’s down from 0.5% from October 2018 and is the lowest reading for any October in at least 20 years. Increasing home prices have diminished foreclosure risk, playing a part in keeping the foreclosure rate consistent at 0.4% every month since November 2018.

“Home-price growth builds homeowner equity and reduces the likelihood of a loan entering foreclosure,” said Frank Nothaft, CoreLogic’s chief economist. “The national CoreLogic Home Price Index recorded a 3.3% annual rise in values through October 2019, and price growth was the primary driver of the $5,300 average gain in equity reported in the latest CoreLogic Home Equity Report.”

Still, some pockets of lesser mortgage performance persist around the country. Although the serious delinquency rate nationwide remains at a 14-year low, for example, 14 cities recorded small annual increases this past October in loans that at least 90 days overdue, including Panama City, Florida (where serious delinquencies inched up 0.4 percentage points) and Dubuque, Iowa (which saw a rise of 0.2 percentage points).

In regard to the overall delinquency rate, eight metro areas — all concentrated within the South and Midwest regions — posted small annual increases. The largest gains were found in Pine Bluff, Arkansas (up 1 percentage point); Dubuque, Iowa (up 0.1 percentage points); and Rockford, Illinois (up 0.2 percentage points).

“National foreclosure and serious delinquency rates have remained fixed at record lows for at least the last six months,” said Frank Martell, president and CEO of CoreLogic. “However, as markets can be much more volatile at the metro level, both late-stage delinquencies and foreclosures have continued to increase at this level in the Midwest and Southern regions of the country.”


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