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Economy, Real Estate

Serious Delinquencies Build

Source: https://www.corelogic.com/blog/2020/11/serious-delinquencies-build.aspx

  • The nation’s overall delinquency rate was 6.6% in August.
  • All states logged annual increases in both overall and serious delinquency rates in August.

In August 2020, 6.6% of home mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure)[1], unchanged from July 2020, but a 2.9-percentage point increase from August 2019, according to the latest CoreLogic Loan Performance Insights Report.

The share of mortgages that were 30 to 59 days past due – considered early-stage delinquencies – was 1.6% in August 2020, down sharply from a post-pandemic high of 4.2% in April 2020 and below the year ago rate of 1.8%. The share of mortgages 60 to 89 days past due was 0.8% in August 2020, up from 0.6% in August 2019 and down from 2.8% in May 2020.

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – increased to 4.3% in August up from 1.3% a year earlier. August’s number represented the highest rate since February 2014. The increase in the serious delinquency rate was driven by an increase in the share of mortgages 150 to 179 days past day, which spiked to 1.2%, the highest rate in more than 21 years and double the January 2010 peak caused by the Great Recession. The foreclosure inventory rate – the share of mortgages in some stage of the foreclosure process – remained low at 0.3% in August 2020, down from 0.4% from August 2019.

Figure 1: Current- to 30-Day Transition Rate

In addition to delinquency rates, CoreLogic tracks the rate at which mortgages transition from one stage of delinquency to the next, such as going from current to 30 days past due (Figure 1). The share of mortgages that transitioned from current to 30 days past due dropped back to 0.9% in August 2020 – a decrease from 3.4% in April 2020.

Figure 2: States With the Highest and Lowest Rate of Mortgages At Least 30 Days Past Due

Figure 2 shows the states with the highest and lowest share of mortgages 30 days or more delinquent. In August 2020, that rate was highest in Louisiana at 10% and lowest in Idaho at 3.5%. All U.S. states posted annual gains in their overall delinquency rate in August 2020. The states that logged the largest annual increases were Nevada (+5.3 percentage points), Hawaii (+4.9 percentage points), New Jersey (+4.6 percentage points) and Florida (+4.5 percentage points).

Figure 3: Percentage of Mortgages At Least 30 Days Past Due For the Ten Largest Metropolian Areas

Figure 3 shows the 30-plus-day past-due rate for August 2020 for 10 large metropolitan areas.[2] Miami had the highest rate at 12% and San Francisco had the lowest rate at 4.2%. Miami’s rate increased 7 percentage points from a year earlier. Outside of the largest 10, all but one metro recorded an increase in the overall delinquency rate, with tourist destinations such as Kahului, Hawaii, Las Vegas, Nevada and Miami, Florida as well as oil-dependent Odessa, Texas and Midland, Texas, showing the largest gains.

To learn more about the data behind this article and what CoreLogic has to offer, visit https://www.corelogic.com/.

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Founded in 1992 with the aim of accurately documenting import‐export transactions in the Americas, built and maintained by an international team, Descartes Datamyne today is a top‐ranked provider in the highly competitive US market for trade data.