The coronavirus pandemic has left many unemployed and, therefore, struggling to pay their mortgage. A new report from CoreLogic, shows that mortgage performance in the U.S. was improving into March, but when COVID-19 hit, unemployment reached record highs, impacting homeowners.
According to CoreLogic’s Loan Performance Insights Report, in April, 6.1 percent of all mortgages across the U.S. were in some stage of delinquency (30 or more days past due, including foreclosure). Compared to March numbers, this is an increase of 2.5 percent.
Here’s the breakdown by stage of delinquency:
Early Stage – 30 to 59 days past due
4.2 percent, up from 1.7 percent in April 2019
Adverse – 60 to 89 days past due
0.7 percent, up from 0.6 percent in April 2019
Serious – 90 days or more past due, including foreclosure
1.2 percent, down from 1.3 percent in April 2019
Foreclosure Inventory Rate
0.3 percent, down from 0.4 percent in April 2019
Transition Rate – mortgages that transitioned from current to 30 days past due
3.4 percent, up from 0.7 percent in April 2019
The coronavirus hot spots at the time, New York and New Jersey, had some of the largest overall delinquency rate increases: 4.7 and 4.6 percentage points YoY, respectively. In addition, areas that were hit hard in the tourism and business travel sector, also posted delinquency increases. For example, Nevada, Florida and Hawaii posted increases of 4.5, 4.0 and 3.7 percentage points, respectively.
Leading the nation in overall delinquency gains are Miami, Fla. (up 6.7 percentage points), Kahului, Hawaii (up 6.2 percentage points), New York, N.Y. (up 5.5. percentage points), Atlantic City, N.J. (up 5.4 percentage points), and Las Vegas, Nev. (up 5.3 percentage points).
“The resurgence of COVID-19 infections across the country has created economic uncertainty and leaves those who are unemployed concerned with their ability to make monthly mortgage payments,” said Dr. Frank Nothaft, chief economist at CoreLogic. “The latest forecast from the CoreLogic Home Price Index predicts prices declining in all states through May 2021, erasing some home equity and increasing foreclosure risk.”
“Despite the scale and suddenness of the pandemic, mortgage delinquency has yet to emerge as a major issue, thanks to government COVID-19 relief programs and other housing finance industry efforts,” said Frank Martell, president and CEO of CoreLogic. “As the true impact of the economic shutdown during the second quarter of 2020 becomes clearer, we can expect to see a rise in delinquencies in the next 12-18 months—especially as forbearance periods under the CARES Act come to a close.”
For more information, please visit www.corelogic.com.