Mortgage Delinquency Rates Hover at 20 Year Lows in U.S.

Based on CoreLogic's latest monthly Loan Performance Insights Report, nationally, 3.7% of U.S. mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in October 2019, representing a 0.4 percentage point decline in the overall delinquency rate compared with October 2018, when it was 4.1%.

As of October 2019, the foreclosure inventory rate - which measures the share of mortgages in some stage of the foreclosure process - was 0.4%, down 0.1 percentage points from October 2018. The October 2019 foreclosure inventory rate tied the prior 11 months as the lowest for any month since at least January 1999.

Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency, as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

The rate for early-stage delinquencies - defined as 30 to 59 days past due - was 1.8% in October 2019, down from 1.9% in October 2018. The share of mortgages 60 to 89 days past due in October 2019 was 0.6%, down from 0.7% in October 2018. The serious delinquency rate - defined as 90 days or more past due, including loans in foreclosure - was 1.3% in October 2019, down from 1.5% in October 2018. The serious delinquency rate has remained consistent since April 2019.

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.7% in October 2019, unchanged from October 2018. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2%, while it peaked at 2% in November 2008.

"Home price growth builds homeowner equity and reduces the likelihood of a loan entering foreclosure," said Dr. Frank Nothaft, chief economist at CoreLogic. "The national CoreLogic Home Price Index recorded a 3.3% annual rise in values through October 2019, and price growth was the primary driver of the $5,300 average gain in equity reported in the latest CoreLogic Home Equity Report."

No states posted a year-over-year increase in the overall delinquency rate in October 2019. The states that logged the largest annual decreases included North Carolina (down 0.9 percentage points) and Mississippi (down 0.8 percentage points). Eight other states followed with annual decreases of 0.6 percentage points.

In October 2019, eight metropolitan areas in the Midwest and South recorded small annual increases in overall delinquency rates. The largest annual increases in October 2019 were in the following metros: Pine Bluff, Arkansas (1.0 percentage points); Dubuque, Iowa (0.2 percentage points) and Rockford, Illinois (0.2 percentage points). Five other metros were up 0.1 percentage points: Columbus, Indiana; Kokomo, Indiana; Manhattan, Kansas; Oshkosh-Neenah, Wisconsin and La Crosse-Onalaska, Wisconsin-Minnesota.

While the nation's serious delinquency rate remains at a 14-year low, 14 metropolitan areas recorded small annual increases in their serious delinquency rates. Metros with the largest increases were Panama City, Florida (0.4 percentage points) and Dubuque, Iowa (0.2 percentage points). The remaining 12 metro areas each logged an annual increase of 0.1 percentage point.

"National foreclosure and serious delinquency rates have remained fixed at record lows for at least the last six months," said Frank Martell, president and CEO of CoreLogic. "However, as markets can be much more volatile at the metro level, both late-stage delinquencies and foreclosures have continued to increase at this level in the Midwest and Southern regions of the country."