Driven by earnings gains and growing home prices—and in a healthy indicator for the lending market—the amount of delinquent home loans is at a low point, according to a new report.
In January, 4 percent of mortgages nationwide were in trouble, either delinquent or in foreclosure—a low not seen in 20 years, according to CoreLogic’s latest Loan Performance Insights Report. Including January, delinquencies have been on the downswing for 13 months in a row, and last January, they accounted for 4.9 percent of mortgages. Of home loans nationwide, 0.4 percent were in foreclosure in January.
Delinquencies in all forms shrunk, as well, with 1.9 percent of loans 30-59 days past due; 0.7 percent 60-89 days past due; and 1.4 percent 90 or more days past due. Less than 1 percent of loans moved into the primary stage; in Nov. 2008, that figure was at a peak 2 percent.
According to Frank Martell, CEO/president of CoreLogic, a continuing downtrend is likely, as the labor market is solid, and rates are reasonable.
“As the economic expansion continues to create jobs and low mortgage rates support home-buying this spring, delinquency rates are likely to trend lower during the coming year,” says Martell. “The decline in delinquency rates has occurred in nearly all parts of the nation.”
One exception to the trend? Areas that have been devastated by disasters, namely in the Southeast, where there were two major hurricanes in 2018. In January, delinquencies increased in 13 markets, including five in the Southeast.
In general, however, the lending market is stable, especially in comparison to other credit types, says Dr. Frank Nothaft, chief economist at CoreLogic.
“Income growth, home appreciation and sound underwriting combined have pushed delinquency rates to their lowest level in 20 years,” Nothaft says. “The low delinquency rates on home mortgages are a contrast to the rising delinquency rates on consumer credit. While home mortgage delinquency rates are at, or are near, their lowest levels in two decades, delinquency rates for auto and student loans are higher now than they were during the early and mid-2000s.”
For more information, please visit www.corelogic.com.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at email@example.com.