Mortgage borrowers 60 days or more late with their payments declined both quarter-to-quarter and year-over-year, as recession-era defaults work their way out of the system.

There were 1.86% of mortgages past due 60 days or more in the fourth quarter, compared with 1.91% in the third quarter and 2.28% in the fourth quarter of 2016, according to TransUnion.

"Mortgage delinquency rates continue to decline, reaching their lowest levels since the recession," Joe Mellman, senior vice president and mortgage business leader at TransUnion, said in a press release. "This largely reflects recession-era defaults having worked their way out of the system and recent originations being underwritten to a very high standard."

Mortgage delinquencies decline

By age group, the highest default rate belonged to Gen Xers, those born between 1965 and 1979, at 2.33%. Gen Z members, people born after 1995, had the lowest rate at 1.23%, which might be expected given that this group is the newest to enter the market. Millennials had a 1.55% delinquency rate, while baby boomers were at 1.6% and the Silent Generation, those born before 1945, had a 1.77% default rate.

Average debt per borrower increased to $201,736 from $194,415 one year prior. However, the average balance per new loan declined in the third quarter (there is a one-quarter reporting lag on new origination data, TransUnion said) to $228,563 from $235,820 in the same quarter one year prior.

"This quarter we see an interesting dynamic with seemingly contradictory data points in average mortgage debt per borrower increasing, while average new account balances declined," Mellman said.

"There could be multiple factors contributing to this, including cash-out refis increasing average mortgage debt, the drop in refi share lowering average new account balances (since average refi size can be larger than average purchase size) and a change in the mix of purchase origination amounts toward lower balances."

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