September saw a slight seasonal uptick in delinquencies, up by 2% from August, but according to the First Look at September mortgage performance data from Black Knight, the national delinquency rate was still down 11% from this time last year, reflecting on ongoing decline in delinquencies.
The seasonal uptick means the total non-current inventory has increased by around 40,000, but that inventory is down 211,000 from last year. The lowest non-current rates, including delinquencies plus active foreclosures) can be found in Western states, including Colorado, Oregon, Washington, Idaho, and California.
Additionally, Black Knight notes that the number of loans in active foreclosure continues to decline as well, while the active foreclosure inventory has fallen to its lowest level since late 2005. Prepayment activity (SMM) rose by 3% from August despite facing headwinds from the typical seasonal decline in home sale-related prepayments, and prepays are now up 121% from the same time last year as falling rates continue to spur refinance activity.
As delinquencies have slipped in recent months, home prices have stayed relatively flat. In August, home price growth sat at 3.8%, after rising for the first time in 17 months in July. June’s annual home price growth rate of 3.7% was the smallest in almost seven years before trending upward.
“It remains to be seen if this is merely a lull in what could be a reheating housing market, or a sign that low interest rates and stronger affordability may not be enough to muster another meaningful rise in home price growth across the U.S,” said Black Knight Data & Analytics President Ben Graboske. “That the strongest gains in—and strongest levels of—affordability were in August and early September could bode well for September/October housing numbers. As such, we’ll be keeping a close eye on the numbers coming out of the Black Knight Home Price Index over the coming months.”