- Both serious delinquency and foreclosure rates were the lowest for an August in 12 years
- No state posted an annual gain in the overall delinquency rate
- Alaska was the only state to post an annual gain in the serious delinquency rate
IRVINE, Calif. — (BUSINESS WIRE) — November 13, 2018 — CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report. The report shows that, nationally, 4 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in August 2018, representing a 0.6 percentage point decline in the overall delinquency rate compared with August 2017, when it was 4.6 percent.
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CoreLogic National Overview of Mortgage Loan Performance, featuring August 2018 Data (Graphic: Business Wire)
As of August 2018, the foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.5 percent, down 0.1 percentage point since August 2017. The August 2018 foreclosure inventory rate tied with the April, May, June and July rates this year as the lowest for any month since September 2006, when it was also 0.5 percent.
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 percent in August 2018, down from 2 percent in August 2017. The share of mortgages that were 60 to 89 days past due in August 2018 was 0.6 percent, down from 0.7 percent in August 2017. The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.5 percent in August 2018, down from 1.9 percent in August 2017. This serious delinquency rate was the lowest for August since 2006 when it was 1.4 percent, and the lowest for any month since March 2007 when it was also 1.5 percent.
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 0.8 percent in August 2018, down from 0.9 percent in August 2017. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent, while it peaked in November 2008 at 2 percent.
“With home-price growth building owners’ equity, and the low national unemployment rate providing opportunities for income growth, further declines in U.S. delinquency and foreclosure rates are likely in coming months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index for the U.S. recorded 5.7 percent annual growth in August. This price gain helped the average homeowner build about $16,000 in equity during the prior year and reduces the likelihood of a borrower transitioning from delinquency to foreclosure.”
While serious delinquencies declined in most metropolitan areas during the last 12 months, urban centers affected by natural disasters continue to show lingering effects. As examples, the serious delinquency rate in the Houston, Naples, and Cape Coral metropolitan areas, places severely affected by Hurricanes Harvey and Irma, remained 0.4 percentage points higher than one year ago.
“Declines in delinquency rates are good news for America’s homeowners and mortgage lenders,” said Frank Martell, president and CEO of CoreLogic. “However, risks that create loan default like natural disasters, overvalued markets and an eventual rise in unemployment remain in the market. CoreLogic Market Conditions Indicator data has identified more than one-third of metropolitan areas are overvalued, putting them at risk of price declines and rising delinquencies if local job losses should occur.”
For ongoing housing trends and data, visit the CoreLogic Insights Blog: www.corelogic.com/insights.
The data in this report represents foreclosure and delinquency activity reported through August 2018.
The data in this report accounts for only first liens against a property and does not include secondary liens. The delinquency, transition and foreclosure rates are measured only against homes that have an outstanding mortgage. Homes without mortgage liens are not typically subject to foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data.
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