Mortgage Delinquencies Decline 22 Straight Months in January

Mortgage Delinquencies Decline 22 Straight Months in January

Residential News » Irvine Edition | By WPJ Staff | March 31, 2023 8:39 AM ET

Based on CoreLogic's latest Loan Performance Insights Report for January 2023, 2.8% 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 0.5 percentage point decrease compared with 3.3% in January 2022 and a 0.2 percentage point decrease compared with December 2022.

To gain a complete view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency. In January 2023, 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): 1.3%, up from 1.2% in January 2022.
  • Adverse Delinquency (60 to 89 days past due): 0.4%, up from 0.3% in January 2022.
  • Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.2%, down from 1.8% in January 2022 and a high of 4.3% in August 2020.
  • Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, up from 0.2% in January 2022.
  • Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, down from 0.7% in January 2022.

U.S. mortgage performance barely moved in January, with overall delinquency and foreclosure numbers hovering near historic lows. Although annual home equity gains slowed significantly in the fourth quarter of 2022, the average borrower still has about $270,000 in equity, which can safeguard against foreclosure. Additionally, although layoffs at some-high profile technology companies have recently made headlines, U.S. unemployment remained at less than 4% in the first two months of 2023.

"The share of home loans in all stages of delinquency continues to decline, down from a high of 7.3% in the spring of 2020 and down by 0.5 percentage points from January 2022," said Molly Boesel, principal economist at CoreLogic. "The annual decrease in overall delinquencies was primarily driven by a large decline in the share of mortgages six months or more past due. Despite the drop in overall delinquencies, the foreclosure rate has slowly crept up. Although it remains near an all-time low, about 30,000 more U.S. homeowners are now involved in the foreclosure process."

State and Metro Takeaways

  • No state posted an annual increase in its overall delinquency rate in January. The states and districts with the largest declines were Alaska, New York and Washington, D.C. (all down by 1 percentage point). The other states' annual delinquency rates dropped between 0.9 and 0.1 percentage points.
  • In January, 25 U.S. metro areas posted an increase in overall delinquency rates. The top three areas for mortgage delinquency gains year over year were Punta Gorda, Florida (up by 2.1 percentage points), Cape Coral-Fort Myers, Florida (up by 2 percentage points) and Mansfield, Ohio (up by 0.5 percentage points).
  • All but two U.S. metro areas posted at least a small annual decrease in serious delinquency rates (defined as more than 90 days late on a mortgage payment). The metros that saw serious delinquencies increase were Cape Coral-Fort Myers, Florida (up by 1.5 percentage point) and Punta Gorda, Florida (up by 1.4 percentage points).

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