Mortgage Delinquency rates remain at rock bottom, says new report

Inman News

CoreLogic reports the number of people behind on their mortgage payments fell to a new record low, helped by rise in home prices and past government protection.

Every state in the U.S. saw the number of people late on their mortgage payments fall in March, when 2.7 percent of all mortgages were in some stage of delinquency, CoreLogic reported on Tuesday.

That’s down from 4.9 percent a year earlier and the lowest rate in over two decades.

The report is a look in time before shifts in the housing and stock markets. The stock market thoroughly entered bear market territory this week after an already-difficult six months. And economists continue to predict a recession either later this year or next.

The rise in mortgage rates wouldn’t impact homeowners’ ability to pay and may not have an impact on the number of distressed or delinquent homes.

A string of forbearance and foreclosure moratoriums helped keep homeowners out of foreclosure and drove down the delinquency rate. Freddie Mac said this month it didn’t expect a backlog of distressed properties.

“The share of borrowers in any stage of delinquency was at an all-time low in the first quarter of 2022,” Molly Boesel, principal economist at CoreLogic, said in a statement. “However, more than one-third of delinquent mortgages remain six months or more past due on their payments.”

There was also a slight uptick in the number of mortgages that went from current to 30 days past due, CoreLogic reported.

“While we may see an uptick in distressed sales over the coming year, historic home equity gains should keep these sales from reaching elevated levels,” Boesel said.

Stages of delinquency, March 2022

  • Early stage delinquency (30 to 59 days past due): 1 percent
  • Adverse delinquency (60 to 89 days past due): 0.3 percent (down 0.4 percent from March 2021)
  • Serious delinquency (90 days or more past due): 1.4 percent (down from 3.5 percent in March 2021)

The number of people whose mortgages were seriously delinquent — meaning they were past due by more than 90 days — was down from a high of 4.5 percent in August 2020.

At 0.2 percent, the foreclosure inventory rate — the share of mortgages in some stage of the foreclosure process — fell to its lowest point since at least January 1999. It was 0.3 percent in March 2021.

Another factor that continues to help people avoid entering the foreclosure process is the ongoing run-up of home prices.

“Rising home prices and the resulting equity gains are providing alternative options to those who may be coming out of forbearance and/or facing foreclosures,” the report said.