Mortgage delinquencies fell again in August, according to the most recent Black Knight [1] First Look for August, down 5.7 percent over the past two months. The report found that this is the strongest such decline during July-August on record, since before 2000.
Black Knight notes that this has may be the best summer on record in terms of mortgage delinquency improvement, however, the impact from Hurricane Florence has yet to be determined.
Additionally, foreclosure starts also pulled back from last month’s spike, bringing the number of active foreclosures back to its continued downward trend. In July, foreclosures jumped 11 percent year over year from June 2017, hitting a three month high.
Black Knight is keeping an eye on Hurricane Florence, as the impact from last year’s hurricane season has started to fade, at least on the mainland. According to the report, there are some 283K homeowners with mortgages in the 18 North Carolina counties FEMA’s declared disaster areas thus far. If the effects of the storm on mortgage performance follow a trend similar to what we saw after Harvey & Irma last year, thousands of homeowners could be at risk of becoming past due.
The study also found that there are fewer homes past due, for both 30 days and 90 days past due. The number of properties that are 30 days past due but not in foreclosure fell by 1,861,000, and the number of properties that are 90 days past due but not in foreclosure fell by 528,000.
Other studies have shown improvements in other areas, such as equity. According to CoreLogic [2], negative equity dropped in Q2.
“Negative equity levels continue to drop across the U.S. with the biggest declines in areas with strong price appreciation,” said CoreLogic President and CEO Frank Martell. “Further, the relatively low level of shadow inventory contributes to the chronic shortage of housing supply and price increases in many markets.”