Despite 2017 Hurricanes, National Mortgage Delinquency Rate Fell Year Over Year
February Foreclosure Rate Declined 0.2 Percentage Points Year Over Year
Early-Stage Delinquency Rates Were Flat from February a Year Ago
CoreLogic® released its monthly Loan Performance Insights Report, which shows that, nationally, 4.8 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in February 2018. This represents a 0.2 percentage point decline in the overall delinquency rate, compared with February 2017 when it was 5 percent.
As of February 2018, the foreclosure inventory rate—which measures the share of mortgages in some stage of the foreclosure process—was 0.6 percent, down 0.2 percentage points from 0.8 percent in February 2017. Since August 2017, the foreclosure inventory rate has been steady at 0.6 percent, the lowest level since June 2007, when it was also 0.6 percent. The February 2018 foreclosure inventory rate was the lowest for February in 11 years; it was also 0.6 percent in February 2007.
Measuring early-stage delinquency rates is essential for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency, as well as transition rates, which indicate the percentage of mortgages is moving from one stage of delinquency to the next.
The rate for early-stage delinquencies (defined as 30-59 days past due) was 2.1 percent in February 2018, up from 2 percent in January 2018 and unchanged from February 2017. The share of mortgages that were 60-89 days past due in February 2018 was 0.7 percent, down from 0.8 percent in January 2018 and unchanged 0.7 percent in February 2017. The serious delinquency rate (defined as 90 days or more past due, including loans in foreclosure) was 2.1 percent in February 2018, unchanged from January 2018 and down from 2.2 percent in February 2017. The February 2018 serious delinquency rate was the lowest for February since February 2007, when it was 1.6 percent.
"Last year's hurricanes continue to affect loan performance in affected markets, showing up in statewide data," said Dr. Frank Nothaft, chief economist for CoreLogic. “Serious delinquency rates in February were 50 percent higher than in August 2017 in Texas, and nearly double in Florida, even though the wind and flood damage was primarily in coastal markets. In Puerto Rico, the damage was widespread. Serious delinquency rates were up five-fold over the August-to-February period, with a significant increase in all metropolitan areas there.”
Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.9 percent in February 2018, up from 0.8 percent in January 2018 and down from 1 percent in February 2017. By comparison, in January 2007, just before the start of the financial crisis, the current- to 30-day transition rate was 1.2 percent, while it peaked in November 2008 at 2 percent.
“Overall delinquency rates fell in the U.S. over the past year, driven by a long run of stringent underwriting, higher employment and wages,” said Frank Martell, president and CEO of CoreLogic. “At the same time, our CoreLogic U.S. Home Price Index (HPI) showed a 6.4 percent increase in home-price appreciation for the 12 months, which ended in February 2018. These factors bode well for the fortunes of both homeowners and mortgage servicers.”
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