The rate of mortgage delinquencies remains
significantly elevated from last year, but there is gradual improvement. The national
rate moved higher in October on an annual basis per CoreLogic’s Loan
Performance Insights Report. Loans that were 30 or more days past due,
including those in foreclosure, represented 6.1 percent of all active mortgages
compared to 3.7 percent in October 2019. In September, however, the annual rate
of increase was 6.3 percent.
Early-stage delinquencies are exhibiting the
most positive trend. Loans that were 30 to 59 days past due declined from a 1.8
percent rate in October 2019 to 1.4 percent. The rate for that delinquency
bucket spiked at 4.2 percent in April when the first
financial effects of the COVID-19 pandemic hit. The rate for loans in “adverse”
delinquency, i.e., 60 to 89 days non-current, was unchanged from a year earlier
at 0.6 percent.
The rate of serious delinquencies, the
share of loans more than 90 days past due, remains more than three times its
year-ago rate of 1.3 percent but is slowly improving. It inched down from the August and September
rates of 4.3 percent and 4.2 percent respectively to 4.1 percent.
The foreclosure inventory rate, loans in
the process of foreclosure, is down 0.1 percent on an annual basis. Due largely
to the moratoriums in effect due to the pandemic, the rate has stayed at 0.3
percent for seven consecutive months. That is the lowest rate since CoreLogic
began tracking the statistic in 1999.
In October 0.8 percent of active mortgages
transitioned from current to 30-days past due. This is up from 0.7 percent in October 2019.
“During early autumn, the improving
economy enabled more families to remain current on their home loan,” said Dr.
Frank Nothaft, chief economist at CoreLogic. “In September and October, 0.8
percent of current borrowers transitioned into 30-day delinquency. This is the
same as the monthly average for the 12 months prior to the pandemic, and well
below the record peak of 3.4 percent of borrowers transitioning into
delinquency that we observed in April 2020.”
Every state posted an
annual increase in its delinquency rate. Hawaii and Nevada, both major tourist
destinations, grew the most. Hawaii began lifting some of its travel
restrictions during the month and its rate was up 4.7 points from October 2019.
Nevada had a 4.6-point gain.
Similarly, nearly all
U.S. metro areas logged an increase in overall delinquency rates in October.
Lake Charles, Louisiana, with an economy damaged by both COVID-19 and Hurricane
Laura, had the largest annual increase for the second consecutive month, 11
percentage points. Other metro areas with significant overall delinquency
increases included Odessa, Texas (up 10.3 percentage points); Kahului, Hawaii
(up 7.8 percentage points) and Midland, Texas (up 7.5 percentage points).