The share of mortgage delinquencies triggered by unemployment or the loss of income is on the decline, according to data released Thursday by Freddie Mac.
For the first half of 2015, approximately 38 percent of mortgage delinquencies were brought about by job loss or some type of income curtailment, according to an analysis of mortgages guaranteed or owned by Freddie Mac. That number is a substantial decline from the share reported in 2010, which was 55 percent.
The declining share of mortgage delinquencies brought on by employment issues over the last five years is concurrent with the declining unemployment rate. According to the Bureau of Labor Statistics (BLS), the national unemployment rate was 9.3 percent at the end of 2010, but had fallen to 5.3 percent as of the end of June 2015 (the end of Q2).
"This looks like more evidence that the housing market and the national economy are generally headed in the right direction," Freddie Mac wrote on its blog on Thursday. "However, it also shows job issues remain the single most significant factor behind mortgage delinquencies."
The share of delinquencies on Freddie Mac-back mortgages caused by excessive obligations, or too much debt, remained virtually unchanged from 2010 to 2015 at 21 percent (about one-fifth). The share of delinquencies that occur due to property issues or abandonment increased (from 0.4 percent in 2010 to 3 percent in 2015) but still accounted for a small percentage of delinquencies. Shares of late mortgage payments triggered by marital difficulties and inability to sell or rent the property both held steady from 2010 to 2015 (at 4 percent and 2 percent, respectively).
The percentage of delinquencies brought about by illness or death rose from 8 percent in 2010 up to 11 percent in 2015, according to Freddie Mac. The share of delinquencies that stemmed from "other" issues more than doubled in the five-year period from 10 percent up to 21 percent; those other issues may include major disaster areas, fraud, military service, and payment adjustments or disputes, according to Freddie Mac.