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Delinquency Rate Falls for 10th Straight Quarter

past-due-mortgage-threeThe national mortgage delinquency rate declined for the 10th consecutive quarter in Q2 2014 and is at its lowest level since 2008, according to TransUnion's quarterly mortgage report.

The rate of U.S. mortgage delinquencies, defined as those in which the borrower is more than 60 days delinquent on the mortgage account, fell  from 3.61 percent in Q1 to 3.46 percent for Q2 (a change of 4.2 percent), according to TransUnion. The delinquency rate is down 20 percent from Q2 2013 when a rate of 4.32 percent was reported. A quarter-over-quarter increase in delinquency rate has not occurred since Q3 to Q4 in 2011.

"Mortgage delinquency rates continue to drop and we are seeing this decline across all age groups," said Steve Chaouki, head of financial services for TransUnion. "Overall, the improvements in the mortgage delinquency rate can be attributed to a number of factors. These include the clearing of severely delinquent accounts through foreclosure as well as a lower rate of new delinquencies from post-recession vintages, which generally are of significantly higher credit quality and have experienced much better performance than mortgages originated before the recession."

Borrowers below the age of 30 had the lowest delinquency rate for Q2 in 2014 at 2.34 percent, which is a decline of 28.6 percent from Q2 2013. This group owns only 4.16 percent of all mortgage accounts in the U.S., however. The demographic with the largest share of mortgages, age 50 to 59 (27.06 percent of accounts), had a delinquency rate equal to that of the national average at 3.46 percent.

The age group with the highest delinquency rate (4.43 percent) was age 40 to 49, which owns 24.66 percent of all mortgages in the U.S.

The mortgage delinquency rate declined year-over-year in all 50 states and the District of Columbia, according to TransUnion. The state with the highest delinquency rate was Florida (7.11 percent), followed by New Jersey (6.78) and Nevada (5.54) while the states with the lowest delinquency rates were North Dakota (1.00 percent), South Dakota (1.45) and Alaska (1.52).

TransUnion reported that the number of mortgage accounts in the country rose slightly from 52.4 million in Q1 to 52.8 million in Q2. This number has been steadily declining for the last six years since the housing bust, however. In 2008, more than 62 million mortgage accounts were reported in the U.S.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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