US Mortgage Delinquency Rates Fall For Fifth Consecutive Month

Tue, 13 April 2021  |  economy housing 

For the month of January, 5.6% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 2.1-percentage point increase in the overall delinquency rates compared to January 2020. Nationally, the overall delinquency has been declining month to month since August 2020.

• Early-Stage Delinquencies (30 to 59 days past due): 1.3%, down from 1.7% in January 2020.
• Adverse Delinquency (60 to 89 days past due): 0.5%, down from 0.6% in January 2020.
• Serious Delinquency (90 days or more past due, including loans in foreclosure): 3.8%, up from 1.2% in January 2020 but 0.5 percentage points below the August 2020 peak.
• Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, down from 0.4% in January 2020.
• Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.7%, up from 0.6% in January 2020.

For families experiencing financial distress, the year began on an encouraging note with delinquencies the lowest they’ve been since the onset of the pandemic. However, millions of homeowners remain in mortgage forbearance plans that were originally scheduled to begin expiring in March 2021. To provide additional time for owners to regain their financial footing and support during the recovery, the Federal Housing Finance Agency announced a six-month extension of forbearance for Government-Sponsored Enterprise loans.

“While delinquency rates are higher than we would like to see, they continue to decline,” said Frank Martell, president and CEO of CoreLogic. “At the same time, foreclosure rates remain at historic lows. This is a good sign, and considering the improving picture regarding the pandemic and climbing employment rates, we are looking at the potential for a strong year of recovery."

“The transition rate from current to delinquent this January was the lowest in twelve months, which is another hopeful sign that family finances are beginning to improve,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Further, the transition from 30- to 60-day delinquency was the lowest since last March and is likely to decline further with strong job growth. The consensus view among economists is that the 2021 economy will expand at the fastest rate since 1984.”

State and Metro Takeaways:

• All U.S. states and nearly all metro areas logged increases in annual overall delinquency rates in January.
• Hawaii and Nevada (up 4.2 and 4.1 percentage points, respectively) logged the largest annual increase in overall delinquency rates, as these states are dependent on tourism, which has been slow to recover.
• Among metros, Odessa, Texas, experienced the largest annual increase with 9.7 percentage points as the area is still recovering from significant job loss in the oil industry.
• Other metro areas with significant overall delinquency increases included Midland, Texas (up 7.7 percentage points) and Kahului, Hawaii (up 7 percentage points).

Source: CoreLogic