CoreLogic links the current mortgage default rate, which is back to pre-pandemic levels, to the growth of national income. The company says the national rate, indicating the percentage of mortgages that are 30 days or more past due or in foreclosure, dropped to 3.6% in November. This is a decline of 2.3 percentage points from the November 2020 level of 5.9%.
The company claims that for the first time since the start of the pandemic, delinquencies nationwide have fallen below the March 2020 level of 3.6%, qualifying it as a sign that mortgage lending performance is tracking the country’s income growth. At the same time, foreclosure rates remain at historic lows due to the high level of equity borrowers since recent record house price increases. “These factors combined have helped borrowers weather the lasting economic impacts brought about by the pandemic and avoid falling behind on payments or losing their homes,” according to CoreLogic’s Loan Performance Report.
“Non-farm employment grew by 6.45 million in 2021, helping to rebuild incomes for families struggling financially during the pandemic,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Income growth has helped lower delinquency rates and home equity accumulation has reduced the likelihood of a hard sale for families experiencing financial difficulties.”
The number of non-current loans has decreased at each step. Loans in arrears, 30-59 days past due, accounted for 1.2% of loans in November, down from 1.4% the previous November and the rate for those 60-89 days past due has been halved, to 0.3%. Serious delinquencies, loans past due for 90 days or more, including foreclosure loans, which peaked at 4.3% in August 2020, are now at a rate of 2.0%, again a little more than half the rate a year earlier.
the foreclosure inventorythe share of mortgages at some stage in the foreclosure process, was 0.2% in November, down 0.1 points year-on-year and the lowest on record since 1999.
The percentage of mortgages that transitioned 30-day non-current rate in November was 0.6%, compared to 0.8% a year earlier.
Delinquencies decreased in the 50 states with the greatest improvement, 3.8 percentage points, in Nevada. Declines of between 3.6% and 3.2% occurred in New Jersey, Hawaii, Florida and New York. The only metropolitan area that did not see an improvement in crime was Houma-Thibodaux, Louisiana, which was recovering from Hurricane Ida last fall.