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Home Prices Reducing Foreclosure Risk

Delinquencies remained at near-record lows as of December 2019 as equity remained strong, according to CoreLogic. The 30 days or more delinquency rate for December 2019 was 3.7%, representing a 0.4% decline in the overall delinquency rate compared with December 2018.

Additionally, the amount of equity in mortgaged real estate increased by $489 billion in the fourth quarter of 2019 from the fourth quarter of 2018, an annual increase of 5.4%, according to the latest CoreLogic Equity Report, boosted by home price growth. 

“The CoreLogic HPI shows home price growth quickened during the last few months of 2019, padding the home equity cushion for owner,” said Frank Nothaft, Chief Economist, CoreLogic. “Our HPI Forecast for 2020 anticipates a further pickup in appreciation, adding to home-equity wealth for owners and lowering foreclosure risk.”

No states posted a year-over-year increase in the overall delinquency rate in December. The states that logged the largest annual decreases included North Carolina and Mississippi (both down 0.8 percentage points). South Carolina (down 0.7 percentage points) experienced the third-largest annual decrease, followed by Louisiana, New York and Tennessee (all down 0.6 percentage points).

Meanwhile, 16 metro areas recorded at least a small annual increase. Enid, Oklahoma logged the largest increase (up 0.4 percentage points), followed by Pine Bluff, Arkansas (up 0.3 percentage points); Dubuque, Iowa (up 0.2 percentage points) and St. Joseph, Missouri-Kansas (up 0.2 percentage points). The other 12 metro areas logged increases of 0.1 percentage points.

“The mortgage market had another solid year in 2019, and loan performance across the country continues to show improvement,” said Frank Martell, President and CEO of CoreLogic. “The longest economic expansion in history helped serious delinquency rates reach a 20-year low. As mortgage rates continue to fall in the wake of recent global events, we may see homeowners refinance into lower-monthly payments, or into shorter-term mortgages, which can further reduce delinquency and foreclosure risk.”

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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