Bolstered by a strong job market and economy, delinquency rates across the country remain at record lows.
Across the United States, delinquency rates were 3.7 percent in October 2019, according to the latest CoreLogic data released on Tuesday. While the number of homeowners falling behind on their mortgage payments jumped from 3.6 percent the previous month, the rate marks the 12th consecutive month that the foreclosure rate was the lowest in 20 years. At the same time last year, the rate was 4.1 percent.
CoreLogic
Foreclosures, or a situation in which one’s home is seized by the government due to the owner’s inability to pay, are at 0.4 percent — a rate unsurpassed since January 1999. According to CoreLogic, the main reason for the low numbers has to do with home value growth and a strong economy. At the height of the 2008-2009 housing crash, the falling equity was one of the main reasons more people struggled with their mortgage payments.
“Home price growth builds homeowner equity and reduces the likelihood of a loan entering foreclosure,” Dr. Frank Nothaft, chief economist at CoreLogic, said in a press statement.
CoreLogic
Some pockets of the country, particularly in the South and the Midwest, did see small spikes in delinquency rates. Rates in Pine Bluff, Arkansas; Dubuque, Iowa; and Rockford, Illinois, rose by 1.0 percentage point, 0.2 percentage points and 0.2 percentage points, respectively.
But like in the previous month, no state saw a year-over-year gain in its delinquency rates. North Carolina and Mississippi saw the largest drops. The largest share of delinquencies (1.8 percent) in October were in the early stage, between 30 and 59 days past due. The report notes that “measuring early-stage delinquency rates is important for analyzing the health of the mortgage market.”
“National foreclosure and serious delinquency rates have remained fixed at record lows for at least the last six months,” Dr. Frank Martell, president and CEO of CoreLogic, said in a press statement. “However, as markets can be much more volatile at the metro level, both late-stage delinquencies and foreclosures have continued to increase at this level in the Midwest and Southern regions of the country.”
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