Mortgage Delinquency Rates Near Pre-Pandemic Levels in U.S.
CoreLogic’s latest monthly Loan Performance Insights Report shows that 4.2% of all mortgages in the U.S. during July 2021 were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 2.3-percentage point decrease in delinquency compared to July 2020, when it was 6.5%. While overall delinquencies remain above the February 2020, pre-pandemic rate of 3.6%, this is the lowest rate since last March.
To gain an accurate view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency. In July 2021, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:
- Early-Stage Delinquencies (30 to 59 days past due): 1.1%, down from 1.5% in July 2020.
- Adverse Delinquency (60 to 89 days past due): 0.3%, down from 1% in July 2020.
- Serious Delinquency (90 days or more past due, including loans in foreclosure): 2.8%, down from 4.1% in July 2020. While still high, this is the lowest serious delinquency rate since May 2020.
- Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.2%, down from 0.3% in July 2020. This is the lowest foreclosure rate recorded since CoreLogic began recording data (1999).
- Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, down from 0.8% in July 2020.
While we continue to see serious delinquencies improve, approximately one million people nationwide have been unable to make payments for at least half a year. In fact, the share of borrowers six months or more past due made up about one-half of the total delinquencies in July, with many still leaning on options such as forbearance, loan modifications and other government provisions to keep from entering foreclosure.
“Declining delinquency levels are an encouraging sign of economic improvement and the durability of the housing market,” said Frank Martell, president and CEO of CoreLogic. “Looking ahead to the end of many forbearance and other assistance programs, many borrowers receiving support must consider their financial options, including a potential loan modification, to ensure they stay current and keep foreclosures at bay.”
“Even if loan modification or income recovery is unable to help delinquent homeowners become and remain current on their payments, the double-digit rise in home prices may help them avoid a distressed sale,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Homeowners with substantial home equity are far less likely to experience a foreclosure sale, and fortunately, the CoreLogic Home Equity Report found the average owner gained $51,500 in equity in the past year — a five-fold annual increase.”
State and Metro Takeaways:
- In July, all U.S. states logged a decrease in annual overall delinquency rates, with New Jersey (down 3.9 percentage points), Florida (down 3.5 percentage points) and Nevada (down 3.3 percentage points) leading with the largest declines.
- All U.S. metros also posted an annual decrease in overall delinquency rates in July, with Miami (down 5.4 percentage points), Laredo, Texas (down 5.1 percentage points) and Kingston, New York (down 5 percentage points) posting the largest decreases.
- Nevertheless, elevated overall delinquency rates remain in some metros, including Odessa, Texas (11%); Pine Bluff, Arkansas (10.6%) and Laredo, Texas (10.5%).