The risk of default on lease obligations for one family on a mortgage decreased in 1H21



According to RealtyTrac, in the first half of 2021, the risk of default on mortgages for single-family real estate decreased by 16% compared to the previous six months. But in 45 of the country’s 100 largest counties, the likelihood that these loans will fail is still above average.

The average estimate of default risk in June was 36.7, up from 43.9 in January. The score is calculated according to three criteria, measured at the county level: the percentage of rented property, the relative unemployment rate, and the loan-to-value ratio of homes with mortgages.

Reducing the unemployment rate “Impacted the account change,” explained Rick Sharga, executive vice president of RealtyTrac.

“But even with the decline, the risk of default among these rental property owners is still very real, especially in California and Florida,” he said in a press release.

Of the 10 counties with the highest risk scores as of June, three were in California and two in Florida, and Sunshine State also includes eight of the country’s 45 high-risk counties. Seven of these counties are in California.

But the county with the highest DRS is New York (Manhattan) with a risk rating of 73.7, followed by Horrie in South Carolina at 66.3 and Kern in California at 66.

At the other end of the scale is Salt Lake County, Utah, at 6.7, followed by Georgia’s Gwinnett at 16.6 and Travis, Texas at 18.8.

“As the economy recovers, it makes sense to reduce the risk of default for rental property owners,” Sharga said. “But many homeowners still need financial assistance after an 18-month government eviction ban, so it is imperative for state governments to start distributing the $ 45 billion that was postponed to cover missed rent payments for renters whose income has been affected by the pandemic. “

Almost 90% of single family rental homes are owned family investors owning less than ten real estate objects; many of them are protected on mortgage– said RealtyTrac.


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