CoreLogic Loan Performance Insights Find That the Overall US Mortgage Delinquency Rate Drops to a 12-Year Low
Foreclosure rate is the lowest for July in 12 years
Florida and Texas are the only states to post annual gains in serious delinquency rates
Economists anticipate a spike in mortgage delinquency in several Southern states as a result of damage from Hurricane Florence
CoreLogic (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report. The report shows that, nationally, 4.1 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in July 2018, representing a 0.6 percentage point decline in the overall delinquency rate compared with July 2017, when it was 4.7 percent.
As of July 2018, the foreclosure inventory rate - which measures the share of mortgages in some stage of the foreclosure process - was 0.5 percent, down 0.2 percentage points from 0.7 percent in July 2017, and the lowest for a July since 2006. The July 2018 foreclosure inventory rate remained unchanged from April, May and June rates of this year.
Measuring early-stage delinquency rates is important 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 moving from one stage of delinquency to the next.
The rate for early-stage delinquencies - defined as 30 to 59 days past due - was 1.9 percent in July 2018, down from 2.1 percent in July 2017. The share of mortgages that were 60 to 89 days past due in July 2018 was 0.6 percent, down from 0.7 percent in July 2017. The serious delinquency rate - defined as 90 days or more past due, including loans in foreclosure - was 1.6 percent in July 2018, down from 1.9 percent in July 2017. This serious delinquency rate is the lowest for July since 2006 when it was 1.4 percent and the lowest for any month since June 2007 when it was also 1.6 percent.
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 0.8 percent in July 2018, down from 0.9 percent in July 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.
"With the national unemployment rate remaining below 4 percent since July, further declines in U.S. delinquency rates are likely in coming months," said Dr. Frank Nothaft, chief economist for CoreLogic. "The exception will be in local areas impacted by natural hazards or a rise in unemployment. The destruction of homes and disruption to local commerce caused by natural disasters lead to a subsequent spike in local delinquency rates, even for homes that were untouched."
While no state posted year-over-year increases in their 30-plus-day delinquency in July 2018, several metropolitan areas in Florida and Texas recorded month-over-month increases. This indicates properties in North Carolina, South Carolina and Virginia that recently experienced damage from Hurricane Florence may be at risk for early-stage delinquency. CoreLogic identified thousands of homes in these three states that were impacted by wind and water damage from the storm.
"Despite an overall sunny picture of delinquencies, weather-driven hotspots dot the country. We expect higher delinquency rates in the mid-Atlantic region later this year due to Hurricane Florence, which impacted nearly half a million homes in North Carolina alone. We also see increases in serious delinquency rates in Florida and Texas reflecting the damage of Hurricanes Harvey and Irma," said Frank Martell, president and CEO of CoreLogic. "In addition, Hawaii will likely experience an increase in delinquency rates as a result of Hurricane Lane and the eruption of Kilauea."
For ongoing housing trends and data, visit the CoreLogic Insights Blog