Risk aversion, economic momentum and the multidecade nadir of unemployment rates helped push delinquencies to the lowest year-end measure of the 21st century, according to Black Knight.
December's delinquency rate of 3.88% fell from 4.71%
"Our historically low delinquency rates stem from a number of factors," Andy Walden, Black Knight's director of market research, said in a statement to NMN. "Primarily, it's been the risk aversion/high credit quality we've seen in the origination market for the better part of a decade, combined with the heavy blend of refinance originations — driven by low interest rates — which tend to outperform their purchase mortgage counterparts."
The total number of properties with loans 90 or more days past due fell to 511,000 in December,
"Add to that strong employment and housing markets, meaning people can meet their debt obligations and the small share that can't have enough equity to sell out from under their default," Walden continued.
At the state level, the highest delinquency rates all came from the South. Mississippi continued to lead the country with 10.09% of its mortgages being noncurrent, Louisiana was second with 8.13% and Alabama was third with 6.95%.
The Northwest represented the other end of the spectrum. Colorado's 1.9% delinquency rate was lowest in the nation, followed by Oregon's 2.12% and Washington's 2.28%.
Total active foreclosures fell to 0.52% — reaching the lowest year-end rate since 2005 — a drop of 19.23% from December 2017 and an edge up of 1.19% month-over-month. Conversely, foreclosure starts went up to 46,300, rising 4.04% year-over-year and 2.43% month-over-month.
