Thursday , 17 October 2019

Rising Family Income Helped Keep Mortgage Delinquency Rate Low in May

The U.S. mortgage delinquency rate in May continued to hover at the lowest level in more than 20 years.

Not one state posted an annual gain in its overall delinquency rate, serious delinquency rate, or foreclosure rate, according to CoreLogic’s monthly Loan Performance Insights Report.

Early-stage delinquencies – defined as 30 to 59 days past due – were at a rate of 1.7% in May, down from 1.8% in May 2018.

The share of mortgages 60 to 89 days past due was 0.6%, unchanged compared with May 2018.

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.3%, down from 1.8% a year earlier and flat compared with April.

That’s the lowest serious delinquency rate for any month (with the exception of April) since August 2005 when it was also 1.3%.

As of the end of May the foreclosure inventory rate was 0.4%, down 0.1 percentage points compared with May 2018. 

That’s flat compared with the prior six months and the lowest for any month since at least January 1999.

“Growth in family income and home prices continues to support low delinquency rates,” says Frank Nothaft, chief economist at CoreLogic, in the report. “Communities that experienced a rise in delinquencies are generally those that also suffered from natural disasters. Last year’s hurricanes and wildfires, and this spring’s severe flooding from heavy rainstorms and snowmelt have pushed delinquency rates higher in these impacted communities.”

The overall delinquency rate has fallen on a year-over-year basis for the past 17 consecutive months.

However, 20 of the largest metropolitan areas posted at least a small annual increase in their overall delinquency rates. Some of the highest gains occurred in the Midwest and parts of the Southeast.

Specifically, areas impacted by flooding this spring in Kentucky, Ohio, Illinois and Indiana have experienced an increase in delinquency rates.

“While the rest of the country experienced record-low mortgage delinquency rates again in May, the Midwest and parts of the Southeast are still experiencing higher rates as they recover from extreme weather,” says Frank Martell, president and CEO of CoreLogic. “Areas in Kentucky and Ohio, which were hit particularly hard this spring with historic flooding, experienced some of the largest annual gains in the country.”

The post Rising Family Income Helped Keep Mortgage Delinquency Rate Low in May appeared first on MortgageOrb.

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