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The percentage of residential mortgage borrowers who are delinquent was reported at 2.95 percent in Q1, the first time it has been below 3 percent in more than seven years, according to TransUnion's Quarterly Industry Insights Report released Monday. Before Q1, the mortgage delinquency rate had not been below 3 percent since Q3 2007, immediately prior to the beginning of the recession, when it was reported at 2.61 percent.
Subprime consumers had a delinquency rate of 27.2 percent in Q1, a decline of 9 percent year-over-year. The delinquency rate for both subprime consumers and all consumers peaked in Q1 2010 at 40.5 percent and 6.9 percent, respectively. Every state reported a year-over-year decline in mortgage delinquency rate, and most metro areas reported a substantial decrease. Miami had the largest decline among metro areas with a drop of 36 percent down to 6.15 percent.
Consumer sentiment dropped substantially in the first May reading of the University of Michigan's Consumer Sentiment Index, from 95.9 in April down to 88.6, its lowest level since October of last year. Slow economic growth in the first quarter was the largest contributing factor in the large dropoff in consumer sentiment, according to analysts. The decline of more than 7 percentage points comes just one month after the Sentiment Index reported its highest five-month average in 11 years.
