U.S. Mortgage Delinquency Rate Fell to Historic Low in December

U.S. Mortgage Delinquency Rate Fell to Historic Low in December

Residential News » Irvine Edition | By Michael Gerrity | March 9, 2022 8:34 AM ET

Based on CoreLogic's latest monthly Loan Performance Insights Report for December 2021, 3.4% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 2.4 percentage point decrease compared to December 2020, when it was 5.8%. This is the lowest recorded overall delinquency rate in the U.S. since at least January 1999.

To gain a complete view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency. In December 2021, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:

  • Early-Stage Delinquencies (30 to 59 days past due): 1.2%, down from 1.4% in December 2020.
  • Adverse Delinquency (60 to 89 days past due): 0.3%, down from 0.5% in December 2020.
  • Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.9%, down from 3.9% in December 2020 and a high of 4.3% in August 2020.
  • Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.2%, down from 0.3% in December 2020. This is the lowest foreclosure rate recorded since at least January 1999.
  • Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, down from 0.8% in December 2020.

The U.S. unemployment rate declined for the sixth straight month in December 2021 to the lowest since the beginning of the COVID-19 pandemic. Meanwhile, national home prices increased by 18.5 percent year over year, helping more owners regain equity. The combination of these dynamics pushed the overall mortgage delinquency and foreclosure rates to the lowest levels that CoreLogic has recorded in more than two decades.

WPJ News | Frank Nothaft, Freddie Mac's chief economist
Dr. Frank Nothaft

"Nonfarm employment grew by 6.7 million workers during 2021, the largest one-year increase, supporting income growth and keeping more families current on their loans," said Dr. Frank Nothaft, chief economist at CoreLogic. "Nonetheless, places hit hard by natural disasters have experienced a spike in missed payments. Serious delinquency rates for December in the Houma-Thibodaux metro area were nearly two percentage points higher than immediately before Hurricane Ida."

State and Metro Takeaways:

  • In December 2021, all states logged year-over-year declines in their overall delinquency rate. The states with the largest declines were: Nevada (down 3.7 percentage points), Hawaii (down 3.5 percentage points), Florida (down 3.4 percentage points), New Jersey (down 3.3 percentage points) and New York (down 3.2 percentage points).
  • All but one U.S. metropolitan area posted at least a small annual decrease in the overall delinquency rate. The one area where delinquencies were unchanged in December 2021 was Houma-Thibodaux, Louisiana. Houma was impacted by Hurricane Ida in the fall, but its overall December delinquency rate improved from October and November.

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