For the first time since March 2020, the overall rate of mortgage delinquencies fell from a year earlier. While locally some areas are still grappling with job losses and natural disasters, the country is moving towards restoring the financial health of borrowers.
CoreLogic, a global provider of real estate, analytics and data solutions, today released its monthly Loan performance analysis report for April 2021.
In April, 4.7% of all US mortgages were in some form of delinquency (30 days or more delinquent, including mortgages), representing a 1.4 percentage point decrease in delinquency from April 2020, when it was 6.1%. Overall delinquency this month is the lowest in a year.
To get an accurate understanding of the mortgage market and the state of creditworthiness, CoreLogic studies all stages of delinquency. In April 2021, the indicators of delays and transitions, as well as their annual changes, were as follows:
· Early delays (30 to 59 days delay): 1%, up from 4.2% in April 2020.
· Unfavorable misconduct (60 to 89 days delayed): 0.3%, up from 0.7% in April 2020.
· Serious crime (Overdue 90 days or more, including non-repurchase loans): 3.3%, up from 1.2% in April 2020.
· Inventory repurchase rate (share of mortgages at some stages of the foreclosure process): 0.3%, unchanged from April 2020.
· Transition speed (share of mortgages whose maturity was changed by 30 days): 0.6%, up from 3.4% in April 2020.
CoreLogic data for April 2021 reports its first annual decline and the lowest overall delinquency rate since the pandemic began, as job and income recovery allows more homeowners to stay or return to their current mortgage payment status.
In addition, to help borrowers participating in tolerance programs, financial institutions and government agencies continuing to enact provisions which give homeowners ample opportunity to bounce back and keep their homes.
“The dramatic economic recovery and a powerful combination of government financial and regulatory assistance are fueling an unprecedented demand for residential housing and allowing people to buy and stay in their homes,” said Frank Martell, president and CEO of CoreLogic. “The reduction in late payment rates is another manifestation of the benefits of these tailwinds. Barring unforeseen changes, we expect rates to continue to fall and house prices to rise over the next 12-18 months. ”
“Natural disasters and job losses in the oil and gas industry over the past year continue to impact delinquency rates at the local level, despite an overall decline in late payment rates in many urban areas,” said Frank Notaft, chief economist at CoreLogic. “Of all the metropolitan areas, Odessa and Midland, Texas saw the largest annual jump in serious delinquency rates, followed by Lake Charles, Louisiana, hit hard by Hurricanes Laura and Delta in 2020.”
State and subway takeaway
In April, almost all states recorded declines in overall annual delinquency rates (only Wyoming saw a slight increase with a 0.1 percentage point increase), and much of urban areas saw at least a slight annual decline, with only eight of these, there was an increase compared to last year.
· Among the subways, Odessa, Texas, still recovering from a loss of oil jobs, posted the largest annual total growth in arrears at 2.4 percentage points.
· Other urban areas with significant overall increases in crime include Midland, Texas (up 2.3 percentage points); Lake Charles, Louisiana (up 0.8 percentage points) Enid, Oklahoma (up 0.7 percentage points) and Casper, Wyoming (up 0.6 percentage points).