Four of the Five States with Increases in Delinquency Rates in August also had Increases in Unemployment Rates

Loan Performance Insights Report Highlights: August 2019

By Molly Boesel Mortgage Finance

  • The nation’s overall delinquency rate was 3.7% in August.
  • The foreclosure inventory rate for August was 0.4%, where it has stood since November 2018.

In August 2019, 3.7% of home mortgages were in some stage of delinquency[1], down from 3.9% a year earlier and the lowest for the month of August in more than 20 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 August 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%.

Figure 1

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.3% in August 2019, down from 1.5% in August 2018. The serious delinquency rate for this August was below the average of 1.5% for the 2000 – 2006 pre-crisis period and far below the peak of 7.5% in February 2010. The foreclosure inventory rate – the share of mortgages in some stage of the foreclosure process – was 0.4% in August 2019, down from 0.5% a year earlier. August’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 1.8% in August 2019, unchanged from August 2018. The share of mortgages 60 to 89 days past due was 0.6% in August 2019, also unchanged from August 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 August 2019 the current- to 30-day transition rate remained well below levels during the housing crisis. The August current- to 30-day rate was 0.8%, unchanged from a year earlier. The 30- to 60-day transition rate was 16.1% in August, up from 14.9% in August 2018, and the 60- to 90-day transition rate was 25.8% in August, up from 24.6% a year earlier.

Figure 2 shows the states with the highest and lowest share of mortgages 30 days or more delinquent. In August 2019, that rate was highest in Mississippi at 7.3% and lowest in Colorado at 1.7%. Five states logged an annual gain in their overall delinquency rate in August 2019. Iowa saw an increase of 0.2 percentage points, and Minnesota, Nebraska, Wisconsin and Rhode Island all posted an increase of 0.1 percentage points. The rise in overall delinquency in Iowa, Minnesota, Nebraska, and Wisconsin coincided with a rise in the state unemployment rate during the twelve months through August 2019.

Figure 2

Figure 3 shows the 30-plus-day past-due rate for August 2019 for 10 large metropolitan areas.[3] The New York metro had the highest rate at 5.1%. Miami, with the second-highest rate at 5%, saw a sharp decrease in the overall delinquency rate, falling from 5.9% in August 2018. Houston also saw a large year-over-year decrease, from 5.3% in August 2018 to 4.7% in August 2019. San Francisco had the lowest 30-plus-day delinquency rate in August 2019 at 1.2%.

Figure 3

© 2019 CoreLogic, Inc. All rights reserved.

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

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

[3] Metropolitan areas used in this report are the ten most populous Metropolitan Statistical Areas. The report uses Metropolitan Divisions where available.