Strong Economic Conditions Drive Delinquency Rates to Near 20 Year Low

Loan Performance Insights Report Highlights: February 2019

By Molly Boesel Housing Affordability, Mortgage Finance

  • The nation’s overall delinquency rate was 4%.
  • No state logged an annual gain in its overall, serious delinquency, or foreclosure rate in February.

In February 2019, 4% of home mortgages were in some stage of delinquency[1], down from 4.8% a year earlier and the lowest for the month of February in 19 years, according to the latest CoreLogic Loan Performance Insights Report. The measure, also known as the overall delinquency rate, includes all home loans 30 days or more past due, including those in foreclosure. For the month of February historically, the share of delinquent mortgages peaked in 2010 at 11.9%. Since March 2018 the overall delinquency rate each month has been lower than during the pre-crisis period of 2000 through 2006, when the rate averaged 4.7%. A strong economy along with unemployment rates at a 50 year low have contributed to the strong mortgage performance.

Current to 30 Day Transition Rate

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.4% in February 2019, down from 2.1% in February 2018. The serious delinquency rate for February was below the average of 1.5% for the 2000 – 2006 pre-crisis period. The foreclosure inventory rate – meaning the share of mortgages in some stage of the foreclosure process – was 0.4% in February 2019, down from 0.6% a year earlier. February’s foreclosure rate was the lowest for that month in at least 20 years[2] and was below the average pre-crisis level of 0.6%. Rising home prices have led to record amounts of home equity, reducing the risk of foreclosure.

The share of mortgages that were 30 to 59 days past due – considered early-stage delinquencies – was 2% in February 2019, down from 2.1% in February 2018. The share of mortgages 60 to 89 days past due was 0.6% in February 2019, down from 0.7% in February 2018.

In addition to delinquency rates, CoreLogic tracks the rate at which mortgages transition from one stage of delinquency to the next, such as going from current to 30 days past due. Figure 1 shows that in February 2019 the current- to 30-day transition rate remained well below levels during the housing crisis. The February current- to 30-day rate was 1%, unchanged from a year earlier. The 30- to 60-day transition rate was 15.9% in February, up from 15.2% in February 2018, while the 60- to 90-day transition rate was 24.5% last February, down from 24.8% a year earlier.

States with the Highest and Lowest Rate

Figure 2 shows the states with the highest and lowest share of mortgages 30 days or more delinquent. In February 2019, that rate was highest in Mississippi at 7.9% and lowest in Colorado at 1.9%. While no state showed an increase in the 30-plus-day delinquency rate, three states (Minnesota, Nebraska, and North Dakota) showed no change in the rate.

Percentage of Mortgages

Figure 3 shows the 30-plus-day past-due rate for February 2019 for the 10 largest metropolitan areas.[3] The New York and Miami metros had the highest rate at 5.4%. Miami saw a sharp decrease in the overall delinquency rate, falling from 10.3% in February 2018. San Francisco had the lowest 30-plus-day delinquency rate in February 2019 at 1.4%. Houston also saw a large year-over-year decrease, from 8.6% in February 2018 to 5.1% in February 2019. Outside of the largest 10 metro areas, 14 metros posted an annual increase in their overall delinquency rate in February, with the highest gains in four hurricane-ravaged parts of the Southeast (in Florida, Georgia and North Carolina) and in Northern California's Chico metro area, home of last year's devastating "Camp Fire." 

[1] Data in this report is provided by TrueStanding Servicing.

[2] The data in this report date back to January 1999.

[3] Metro areas used in this report are the ten most populous Core-Based Statistical Areas.

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