Foreclosure and delinquency rates fell to a 12-year low in July, according to the latest loan performance data released by CoreLogic [1] recently. While 4.1 percent of mortgages were in some form of delinquency during this period, foreclosure inventory rate in July stood at 0.5 percent.
In July 2017, delinquency rates were at 4.7 percent while foreclosure inventory rate was at 0.7 percent, the report [2] indicated. Additionally, the July 2018 foreclosure inventory rate remained unchanged from April, May and June rates of this year.
Looking at the various stages of delinquency, the report revealed that the rate for early-stage delinquencies (30-59 days past due) was 1.9 percent, decreasing from 2.1 percent in July 2017. The share of mortgages that were 60-89 days past due was 0.6 percent, down slightly from 0.7 percent during the same period last year, while serious delinquency rate (90 days or more past due), including loans in foreclosure stood at 1.6 percent, down from 1.9 percent last year.
“With the national unemployment rate remaining below 4 percent since July, further declines in U.S. delinquency rates are likely in coming months,” said Dr. Frank Nothaft, Chief Economist for CoreLogic.
While none of the states recorded a year-over-year increase, CoreLogic found that several metropolitan areas in Florida and Texas that were still reeling from the impact of last year's hurricanes recorded month-over-month increases in delinquencies.
“The destruction of homes and disruption to local commerce caused by natural disasters lead to a subsequent spike in local delinquency rates, even for homes that were untouched,” Nothaft said.
In fact, that's one of the reasons that the report noted that properties in North Carolina, South Carolina, and Virginia that recently experienced damage from Hurricane Florence may be at risk for early-stage delinquency.
“We expect higher delinquency rates in the mid-Atlantic region later this year due to Hurricane Florence, which impacted nearly half a million homes in North Carolina alone. We also see increases in serious delinquency rates in Florida and Texas reflecting the damage of Hurricanes Harvey and Irma,” said Frank Martell, President and CEO of CoreLogic. “In addition, Hawaii will likely experience an increase in delinquency rates as a result of Hurricane Lane and the eruption of Kilauea.”