Market data including findings from various mortgage delinquency reports are simultaneously pointing to a housing market recovery and
The 1Q 2013 Mortgage Bankers Association National Delinquency Survey shows the delinquency rate for mortgage loans on one-to-four unit residential properties increased to a seasonally adjusted rate of 7.25%, up 16 basis points from the previous quarter, but down 15 basis points from one year ago.
“On a seasonally adjusted basis, the overall delinquency rate increased this quarter, driven by a slight increase in the 30-day delinquency rate,” said MBA’s VP of research and economics, Michael Fratantoni.
The non-seasonally adjusted delinquency rate, “before accounting for the seasonal effect,” which typically decreases between the fourth and first quarters, dropped 76 basis points to 6.75%, down from 7.51% in 4Q 2012.
On an unadjusted basis, the delinquency rate—which includes loans that are at least one payment past due but not in foreclosure process—was only 19 bps lower compared to the first quarter of 2012 rate of 6.94%.
By the end of the first quarter the percentage of loans on which
Similarly the percentage of loans in the foreclosure process remains at 3.55%, the lowest level since 2008, down 19 bps from 4Q12 and 84 bps lower than one year ago.
Also the serious delinquency rate, or loans 90 days or more past due or in the process of foreclosure, was 6.39%, down 39 bps from last quarter, and 105 bps from the same period last year.
A positive development is that normal seasonal patterns “are beginning to re-emerge,” Fratantoni said, even though as has been true post-crisis, “it is still difficult to parse typical seasonal swings from true changes in performance.”
The combined percentage of loans at least one payment past due or in foreclosure has dropped to 10.3% on a non-seasonally adjusted basis, the lowest in over four years and 95 bps lower on a quarterly basis and 103 bps lower annually.
“It is also important to note the decline relative to last year,” Fratantoni said.
He reiterated that slow and uneven economic and job growth in the U.S. is bound to affect the sustainability of current housing market improvements. “There are still many borrowers without stable, full-time employment, or that are still unemployed,” he said. “On a seasonally adjusted basis the largest increases in delinquency were in the subprime fixed and ARM categories, typically sensitive to income and payment shocks, and likely even more so in the current economic environment.”
“Substantial improvements” in the foreclosure rate and inventory nationally and in many states also is sensitive to overall economics as much as it is to regulatory differences.
Currently, the foreclosure inventory decreased in 40 states. Plus, the pace of decline in the number of seriously delinquent loans at over 90 days past due has slowed in recent quarters to its lowest since 2008.
Meanwhile, 33 states saw increases in foreclosure starts.
