Delinquency and foreclosure rates remain unchanged, with positive home equity trends
Mortgage delinquency rates have remained “exceptionally solid” thanks to a rebound in home equity gains, according to CoreLogic.
About 2.8% of mortgage properties in October were in some stage of delinquency (30 days or more past due, including those in foreclosure), mirroring the figures from the same period last year and the preceding month.
The report dissected delinquency rates further: early-stage delinquencies saw a minor uptick to 1.4%, while adverse delinquencies stayed steady at 0.4%. More encouragingly, serious delinquencies decreased to 0.9%, continuing a downward trend from the pandemic-high of 4.3% in August 2020. Meanwhile, foreclosure and transition rates remained unchanged, indicating a stable mortgage environment.
“US mortgage delinquency rates remained healthy in October, with the overall delinquency rate unchanged from a year earlier and the serious delinquency rate remaining at a historic low,” said CoreLogic principal economist Molly Boesel.
“Most of the decline in the serious delinquency rate stems from a decrease in later-stage delinquencies. Importantly, there was no increase in the foreclosure rate, indicating that borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans.”
In a positive turn for homeowners, the report also highlighted a rebound in home equity gains. On average, borrowers saw an increase in their home equity, with a typical gain of $20,000 from the previous year, which could act as a buffer against foreclosure in the near term.
Some states and metropolitan areas experienced shifts in mortgage delinquency rates year over year. Hawaii and Idaho, for instance, saw the most significant increases (+0.5%) in overall delinquencies. On the metro level, Kahului-Wailuku-Lahaina in Hawaii showed the largest jump in delinquencies (+3.8%), while others saw an uptick in serious delinquency rates.
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