Early-Stage Delinquencies at 10-Year Low
CoreLogic’s Loan Performance Insights Report for the month of January 2017 showed that 5.3% of U.S. homeowners were late by 30 days or more in their mortgage payments. This is a decline from the overall rate of mortgage delinquency back in January 2016 of 6.4%.
“Steady job and income growth, combined with full-doc underwriting, has led to low early-stage delinquencies,” explained Dr. Frank Nothaft who serves as chief economist at CoreLogic in a public statement accompanying the analysis.
“January’s 0.9 percent transition rate for current to 30 days late is lower than a year ago and much lower than the 1.5 percent average from 2000 and 2001, during which the foreclosure rate was, conversely, lower than it is today.”
CoreLogic CEO and President Frank Martell added: “The 30-plus delinquency rate, the most comprehensive measure of mortgage performance, is at a 10-year low and rapidly declining. While late-stage delinquencies remain in the pipeline in selected markets, early-stage delinquency performance is stellar and the lowest it’s been in two decades.
“The continued improvement in mortgage performance bodes well for the health of the market in 2017.”
Mortgage Delinquency and Foreclosure By the Numbers
Being delinquent on your mortgage means failing to make payments as required by your lender. And if you are unable to turn your mortgage back to being current and away from delinquency, you could face foreclosure as initiated by your lender.
January 2017’s delinquency rate included mortgages that are in foreclosure. A metric covering mortgages in various stages of foreclosure called the foreclosure inventory rate was 0.8% in January, down from 1.1% during the same period last year.
All Stages of Delinquency
CoreLogic said it analyzes all stages of mortgage delinquency as well as transition rates to come up with a more comprehensive picture of the health and performance of the mortgage market.
Let’s take a look at how mortgages in various stages of delinquency fared in January per CoreLogic data:
- 30-59 Days Past Due. CoreLogic noted that measuring early-stage delinquency is an important indicator of the mortgage market health. Early-stage delinquencies declined in January 2017, at 2.1% compared to 2.4% in January 2016.
- 60-89 Days Past Due. There were fewer mortgages in the 60-89 delinquency stage in January, at 0.7% from 0.8% of a year ago.
- 90 Days or More Past Due. It’s called as serious delinquency and includes mortgages in foreclosure. In January 2017 the serious delinquency rate was 2.5%, which was lower than January 2016’s 3.2%.
Transition Rates
CoreLogic recognized the volatility of early-stage delinquencies and thus included in its analysis transition rates, which it defines as the percent of mortgages moving within the various stages of delinquency.
It found that the number of mortgages that transitioned from being current to 30-days past due was lower in January at 0.9% compared to a year ago’s 1.2%.
CoreLogic compared the current transition rate with that of January 2007’s where the current to 30-day transition rate was 1.2% and peaked at 2% in November 2008.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.
