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Checking in on Condo Delinquency Rates

CoreLogic is reporting that the serious delinquency rate for mortgages on condos has fallen under 1%, which is the lowest report rate since 2007.

According to the report, the serious delinquency rate for condo mortgages in the top-25 markets was 0.9% in February 2019. Single-family residences (SFR) had a serious delinquency rate of 1.3% and multi-unit residences had a rate of 2.2%.

Serious delinquency is defined as 90 days or more past due or in foreclosure proceedings.

The serious delinquency rate has been steadily declining since 2010 when it peaked at more than 10%.

“The delinquency rate for condos was higher than the rate for other SFRs during 2008 to 2012. As a result, the Government Sponsored Enterprises (GSEs) and Federal Housing Administration (FHA) tightened their lending standards,” the report states. “For instance, the current lending guidelines for condo mortgages not only focus on the borrower’s creditworthiness and ability to repay but also on even better fiscal and physical health of the condo community, such as more capital reserve and higher owner occupancy rates.”

CoreLogic’s report adds that declining unemployment rates and rising home prices have helped lower delinquency rates. The Federal Housing Finance Agency released a report that showed home prices have risen 1.1% in Q1 2019 from Q4 2018, according to the latest Home Price Index. 

The report states that around 63% of condo loans that were seriously delinquent in February 2019 were originated between 2003 and 2009, compared to 27% between 2010 and 2018. Both condo and additional single-family residence loans originated in 2007 had the highest delinquency rate.

Experian reported in April that while the average mortgage debt increased from $191,357 in 2008 to $208,180 in 2018, delinquency rates have dropped. The delinquency rate has dropped from 2.9% to 1.9% since the financial crisis, and average 90 days or more past due delinquency rates have fallen to 6.7%.

Older Americans, aged 72 and up, saw the biggest increase in mortgage debt, up $29,602 for a total of $160,735 in 2018 since 2008. Younger age groups saw smaller increases in mortgage debts, with consumers aged 22 to 35 increasing their average mortgage debt from $192,554 in 2008 to $209,713 in 2018.

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.
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