October saw delinquency rates improve both month-over-month and year-over-year, but according to the First Look at October mortgage performance from Black Knight, rates have been increasing in recent weeks. According to Black Knight, the modest increase in 30-year rates in recent weeks, coupled with seasonal slowing in home sales, may dampen prepayment rates in coming months.
For now, Black Knight notes that mortgage prepayments continued to rise, climbing another 16% from September to hit the highest level since May 2013. That puts prepayments up 134% since this time last year as the refi surge continues.
Despite the slight setback, the delinquency rate is now within 0.03% of the record low set back in May at 3.39%, down 3.8% from September and nearly 7% from last year.
Meanwhile, serious delinquencies (all loans 90 or more days delinquent but not yet in foreclosure) continue to improve as well. Down 10K from last month and 66K from last year, there are now 433K serious delinquencies, a more than 14-year low.
Black Knight also identified the top five and bottom five states by non-current percentage. The top states, with the highest percentage of non-current mortgages, were Mississippi (10.18%), Louisiana (7.72%), Alabama (6.68%), West Virginia (6.34%), and Arkansas (6.13%). Mississippi, Louisiana, Alabama, and Arkansas all also posted the highest percentages of loans 90 days or more delinquent, along with Tennessee.
The bottom five states were Colorado (1.73%), Washington (1.81%), Oregon (1.86%), Idaho (1.96%), and California (2.01%). Washington and California also saw some of the biggest improvements in delinquency rates, with rates dropping by 10.89% and 10.58%, respectively. Alaska saw the biggest improvements in the nation, as delinquency rates in the state dropped by 15.67% in October.
Black Knight will release its complete Mortgage Monitor report on December 9.