Loan Performance Insights Report Highlights: July 2021
In July 2021, 4.2% of home mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure), which was a 2.3-percentage point decrease from July 2020 according to the latest CoreLogic Loan Performance Insights Report . However, overall delinquencies were still above the early 2020 pre-pandemic rate of 3.6%.
Overall Delinquency Rates
The share of mortgages that were 30 to 59 days past due — considered early-stage delinquencies — was 1.1% in July 2021, down from 1.5% in July 2020. The share of mortgages 60 to 89 days past due was 0.3% in July 2021, down from 1% in July 2020.
The serious delinquency rate — defined as 90 days or more past due, including loans in foreclosure — was 2.8% in July, down from 4.1% in July 2020, and the lowest rate since the initial jump in serious delinquencies during the pandemic. The CARES Act provides relief to mortgage holders and has worked to keep delinquencies from progressing to foreclosure and therefore the foreclosure inventory rate — the share of mortgages in some stage of the foreclosure process — was at a 22-and-a-half year low of 0.2% in July 2021. However, approximately one million borrowers nationwide have been unable to make payments for at least half a year, and the share of borrowers six months or more past due made up about one-half of the total delinquencies in July.
Stage of Delinquency: Rate of Transition
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 was 0.6% in July 2021 — a decrease from 0.8% in July 2020. Low transition rates indicate that while the rate of mortgages in any stage of delinquency remained elevated, fewer borrowers slipped into delinquency than at the peak of delinquency rates in 2020.
State and Metro Level Delinquencies
Figure 2 shows the states with the highest and lowest share of mortgages 30 days or more delinquent. In July 2021, that rate was highest in Louisiana at 7.1% and lowest in Idaho at 2.1%. All states posted annual decreases in their overall delinquency rates in July 2021 as the employment picture improved across the country compared to a year earlier.
Figure 3 shows the 30-plus-day past-due rate for July 2021 for 10 large metropolitan areas. Miami had the highest rate at 6.6%, and Denver and San Francisco tied for the lowest rate at 2.5%. Miami’s rate decreased 5.4 percentage points from a year earlier. Outside of the largest 10, all metros recorded a decrease in the overall delinquency rate. Nevertheless, elevated overall delinquency rates remain in some metros, including Odessa, Texas (11%); Pine Bluff, Arkansas (10.6%) and Laredo, Texas (10.5%).
Mortgage delinquencies fell from a year ago, with the serious delinquency rate falling to the lowest level since May 2020. However, while job and income growth has helped to push delinquency rates down, there are many families that remain in financial distress. Approximately one million borrowers had missed six or more payments as of July 2021. Fortunately, large increases in home prices has given most borrowers a large home equity cushion, making foreclosure far less likely.
To learn more about the data behind this article and what CoreLogic has to offer, visit https://www.corelogic.com/.
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