US delinquency rate continues to decline with some exceptions

Since early last year, the national delinquency rate has trended lower and that continued in December.

Both the delinquency rate and foreclosure rate were at their lowest levels for December since at least 2000, when CoreLogic began tracking the data.

Its Loan Performance Insights Report shows that nationally, 4.1% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure). That’s a 1.2 percentage point decline in the overall delinquency rate compared with December 2017, when it was 5.3%.

Meanwhile, the foreclosure inventory rate of 0.4% was 0.2 percentage points lower than a year earlier.

“Our latest home equity report found that the average homeowner saw a $9,700 increase in their equity during 2018,” said Dr. Frank Nothaft, chief economist for CoreLogic. “With additional ‘skin in the game,’ rising equity reduces the chances of a foreclosure, helping to push the foreclosure rate down to its lowest level since at least 2000.”

There was a decline in the early-stage (30-59 days past due) delinquency rate from 2.4% in December 2017 to 2.0% in December 2018, while the serious delinquency rate (90+ days past due) was down from 2.1% in December 2017 to 1.5% in December 2018.

The transition rate (from current to 30 days past due) dropped from 1.2% in December 2017 to 0.9% in December 2018.

Disaster-affected markets still struggling
Despite the national picture, several metropolitan areas in Florida, Georgia and North Carolina are still struggling to recover from natural disasters that impacted those areas.

“On a national basis, income and home-price growth continue to support strong loan performance,” said Frank Martell, president and CEO of CoreLogic. “Although things look good across most of the nation, areas that were impacted by hurricanes and other natural hazards are experiencing a sharp increase in the numbers of mortgages moving into 60-day delinquency or worse. One specific example is Panama City, Florida, which was devastated by Hurricane Michael, where 60-day delinquencies rose to 3.5% in December.”