Early-Stage Delinquencies Start to Emerge

Loan Performance Insights Report Highlights: March 2019

By Molly Boesel Housing Affordability, Mortgage Finance

  • The nation’s overall delinquency rate was 4% in March.
  • While the National overall delinquency rate fell in March, 21 states logged an annual increase in the overall delinquency rate.

In March 2019, 4% of home mortgages were in some stage of delinquency[1], down from 4.3% a year earlier and the lowest for the month of March in 13 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 March historically, the share of delinquent mortgages peaked in 2010 at 11.1%. 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%.

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.4% in March 2019, down from 1.9% in March 2018. The serious delinquency rate for March 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 March 2019, down from 0.6% a year earlier. March’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 March 2019, up from 1.8% in March 2018. The share of mortgages 60 to 89 days past due was 0.6% in March 2019, unchanged from March 2018.

Current to 30 Day Transition Rate

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 March 2019 the current- to 30-day transition rate remained well below levels during the housing crisis. The March current- to 30-day rate was 0.9%, up from 0.7% a year earlier. The 30- to 60-day transition rate was 13.4% in March, up from 11.7% in March 2018, while the 60- to 90-day transition rate was 22.4% in March, up from 20.6% 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 March 2019, that rate was highest in Mississippi at 8.2% and lowest in Colorado at 1.9%. In March, 21 states logged an annual increase in the overall delinquency rate, with the highest gains in Mississippi (up 0.5 percentage points) and Alabama (up 0.3 percentage points). 

Percentage of Mortgages at least 30 Days

Figure 3 shows the 30-plus-day past-due rate for March 2019 for the 10 largest metropolitan areas.[3] The New York and Miami metros had the highest rate at 5.5%. Miami saw a sharp decrease in the overall delinquency rate, falling from 9.1% in March 2018. San Francisco had the lowest 30-plus-day delinquency rate in March 2019 at 1.4%. Houston also saw a large year-over-year decrease, from 7.6% in March 2018 to 4.9% in March 2019. Four of the largest 10 metro areas had small increases in the overall delinquency rate in March. Boston and Los Angeles posted gains of 0.1 percentage points, and Denver and Washington, DC showed gains of 0.2 percentage points. 

[1] Data in this report is provided by TrueStanding Servicing.  https://www.corelogic.com/products/truestandings-servicing.aspx

[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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