Mortgage delinquency rates down annually, a sign of a healthy economy
Despite an especially strong hurricane season last year, the national mortgage delinquency rate fell on an annual basis, signaling a healthier economy, according to CoreLogic's Loan Performance Insights Report.
About 4.8% of mortgages nationwide were in some stage of delinquency in February, marking a 0.2 percentage point decline from a year ago.
The foreclosure inventory rate also fell 0.2% year-over-year in February, dipping from 0.8% to 0.6%. The foreclosure inventory rate has held steady at this reading since August 2017, the lowest level seen since it was also 0.6% back in June 2007.
"Overall delinquency rates fell in the U.S. over the past year, driven by a long run of stringent underwriting, higher employment and wages," Frank Martell, president and CEO of CoreLogic, said in a press release.
"At the same time, our CoreLogic U.S. Home Price Index showed a 6.4% increase in home-price appreciation for the 12 months, which ended in February 2018. These factors bode well for the fortunes of both homeowners and mortgage servicers," he said.
The share of early-stage delinquencies, describing loans that are 30-59 days past due, hit 2.1% in February, an uptick from 2% a year ago. The rate of mortgages that were 60-89 days past due remained unchanged at 0.7% on an annual basis, but did decline 0.1% from January.
Delinquency rates varied by state as factors like natural disasters took a toll on affected areas, namely Texas and Florida. Still, impacts from Hurricanes Harvey and Irma weren't enough to negatively impact the national trend of decreasing delinquencies.
"Last year's hurricanes continue to have an effect on loan performance in affected markets, showing up in statewide data. Serious delinquency rates in February were 50% higher than in August 2017 in Texas, and nearly double in Florida, even though the wind and flood damage was primarily in coastal markets," Frank Nothaft, chief economist for CoreLogic, said in the press release.
"In Puerto Rico, the damage was widespread. Serious delinquency rates were up fivefold over the August-to-February period, with a significant increase in all metropolitan areas there," he added.
Overall, the share of mortgages that transitioned from current to 30 days past due declined by 1% annually in February.