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Mortgage Delinquencies Drop to 23-Year Low

CoreLogic has released its monthly Loan Performance Insights Report for June 2022, showing that 2.9% of all mortgages in the U.S. were in some stage of delinquency, —30 days or more past due, including those in foreclosure— representing a 1.5 percentage point decrease compared to 4.4% in June 2021.

To gain a complete view of the mortgage market and loan performance health, CoreLogic has examined all stages of delinquency. In June 2022, 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): 1.2%, up from 1.1% in June 2021.
  • Adverse Delinquency (60 to 89 days past due): 0.3%, unchanged from June 2021.
  • Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.3%, down from 3% in June 2021 and a high of 4.3% in August 2020.
  • Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, up from 0.2% in June 2021.
  • Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.7%, up from 0.6% in June 2021.

LPI National Transition RateOverall mortgage delinquencies and foreclosure rates remained near two-decade lows in June, with home price growth that remains in double digits and a strong U.S. job market helping to keep mortgage performance healthy. Metro areas that rely on the hospitality industry saw particularly large job losses due to the COVID-19 pandemic in 2020, while hurricanes in that same year impacted employment on the Gulf Coast. This naturally resulted in an increase in mortgage delinquencies, but areas of the country that were most impacted are now recovering.

“While early-stage delinquencies edged up in June, they remained near historic lows through the first half of 2022,” said Molly Boesel, Principal Economist at CoreLogic. “Later-stage delinquencies fell by 60% from June 2021, with only a small increase in foreclosures, indicating that delinquent borrowers are able to find alternatives to foreclosure.”

National Delinquencies – 30 Days or More

In June 2022, 2.9% of mortgages were delinquent by at least 30 days or more including those in foreclosure. This represents a 1.5-percentage point decrease in the overall delinquency rate compared with June 2021.

LPI National Delinquency Rate

Mortgage Delinquencies Drop to 23-Year Low

Overall mortgage delinquencies and foreclosure rates remained near two-decade lows in June, with home price growth that remains in double digits and a strong U.S. job market helping to keep mortgage performance healthy. Metro areas that rely on the hospitality industry saw particularly large job losses due to the COVID-19 pandemic in 2020, while hurricanes in that same year impacted employment on the Gulf Coast. This naturally resulted in an increase in mortgage delinquencies, but areas of the country that were most impacted are now recovering.

State and Metro Takeaways:

In June, all states posted annual declines in their overall delinquency rates. The states with the largest declines were:

  • Hawaii and Nevada (both down 2.6 percentage points)
  • New Jersey (down 2.4 percentage points)
  • New York (down 2.3 percentage points)

The remaining states, including the District of Columbia, registered annual delinquency rate drops between 2.1 percentage points and 0.4 percentage points.

All U.S. metro areas posted at least a small annual decrease in overall delinquency rates, including:

  • Kahului-Wailuku-Lahina, Hawaii (down 4.2 percentage points)
  • Odessa, Texas (down 4.1 percentage points)
  • Atlantic City-Hammonton, New Jersey (down 3.3 percentage points)

 

LPI Recession Impact

To read the full report, including more charts and methodology, click here. The next CoreLogic Loan Performance Insights Report will be released on September 29, 2022, featuring data for July 2022. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport, with more than six years of writing experience. She has served as Editor-in-Chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington. She has covered events such as the Byron Nelson, Pac-12 Conferences, the Women in Dallas Film Festival, to freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, she is an avid jazz lover and reader. She can be reached at [email protected]
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