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Mortgage Delinquency Rate Falls to 20-Year Low

According to CoreLogic, the nation’s delinquency rate in the U.S. in December 2021 hit its lowest recorded point since at least January 1999, as found in its monthly Loan Performance Insights Report.

For the month of December, 3.4% of all mortgages in the nation were in some stage of delinquency (defined as 30 days or more past due, including those in foreclosure), representing a 2.4 percentage point decrease compared to December 2020, when that metric was at 5.8%.

In December 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):2%, down from 1.4% in December 2020.
  • Adverse Delinquency (60 to 89 days past due):3%, down from 0.5% in December 2020.
  • Serious Delinquency (90 days or more past due, including loans in foreclosure):9%, down from 3.9% in December 2020 and a high of 4.3% in August 2020.
  • Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process):2%, down from 0.3% in December 2020. This is the lowest foreclosure rate recorded since at least January 1999.
  • Transition Rate (the share of mortgages that transitioned from current to 30 days past due):6%, down from 0.8% in December 2020.

Helping with the decline in the nation’s delinquency rate, the unemployment rate dropped for the sixth consecutive month in December 2021 to the lowest since the beginning of the pandemic. National home prices increased by 18.5% year-over-year, helping more owners regain equity.

“Non-farm employment grew by 6.7 million workers during 2021, the largest one-year increase, supporting income growth and keeping more families current on their loans,” said Dr. Frank Nothaft, Chief Economist at CoreLogic. “Nonetheless, places hit hard by natural disasters have experienced a spike in missed payments. Serious delinquency rates for December in the Houma-Thibodaux metro area were nearly two percentage points higher than immediately before Hurricane Ida.”

In December 2021, all states logged year-over-year declines in their overall delinquency rate. The states with the largest declines included:

  • Nevada (down 3.7 percentage points);
  • Hawaii (down 3.5 percentage points);
  • Florida (down 3.4 percentage points);
  • New Jersey (down 3.3 percentage points); and
  • New York (down 3.2 percentage points).

All but one U.S. metropolitan area posted at least a small annual decrease in the overall delinquency rate. The one area where delinquencies were unchanged in December 2021 was Houma-Thibodaux, Louisiana—an area impacted by Hurricane Ida in the fall, but its overall December delinquency rate improved from October and November.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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