Mortgage delinquency rates and foreclosures have dropped to their lowest rates in 10 years, according to a recent CoreLogic Loan Performance Insights report.
The report found that 4.1% of U.S. mortgages were in a stage of delinquency in November 2018, representing a 1.1 percentage point decline in the overall delinquency rate compared with a year ago.
Serious delinquencies (90 days or more past due and in foreclosure) were at 1.5% in November 2018, which is down from 2% when compared with a year ago. 2017. This is the lowest reading for the month since November 2006, which also ties with August, September and October 2018 for the lowest overall month since March 2007.
Early-stage delinquency loans (30-59 days past due) can be an indicator of the housing market’s overall health, according to CoreLogic. In November 2018, early-stage delinquencies were at about 2%, down from 2.2% a year ago.
The foreclosure inventory rate dipped from 0.6% in November 2017 to 0.4% in November of 2018. As unemployment rates continue to decrease and home prices rise, this pushes delinquencies and foreclosures down. In fact, the overall national delinquency rate has fallen for the last 11 consecutive months.
Additionally, the report measured serious delinquency rates for government, Federal Housing Administration loans versus conventional loans. The report showed FHA loan delinquency rates are more than three times higher than conventional loans.
“Solid income growth, a record amount of home equity and an absence of high-risk loan products put the U.S. homeowner on solid ground,” said Dr. Frank Nothaft, chief economist for CoreLogic. “All of this has helped push delinquency and foreclosure rates to the lowest levels in almost two decades and will provide a cushion if the housing market should turn down.
While delinquencies and foreclosures in 2018 fell, a recent report from Moody’s indicates that 2019 will experience more foreclosures and delinquencies. The Federal Reserve Bank of New York says that while the rate of delinquencies was steady in the last quarter of 2018 at 4.65%, Moody’s predicts looser underwriting standards and rising interest rates will result in higher delinquencies and foreclosures in 2019.