According to CoreLogic's newest monthly Loan Performance Insights Report for May 2021, 4.7% 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 2.6-percentage point decrease in delinquency compared to May 2020, when it was 7.3%. However, overall delinquencies are above the early 2020, pre-pandemic rate of 3.5%.
In May 2021, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:
Many are concerned about a pending foreclosure crisis when government provisions lift. Fortunately, the average homeowner in forbearance has sizeable equity in their home, which has helped create an additional financial buffer for those struggling to make mortgage payments. Thanks to these strong equity gains, and the availability of loan modifications and federal resources, CoreLogic expects most borrowers have had enough support to stave off a foreclosure wave. Additionally, a recent CoreLogic survey of mortgage holders reports 85% of respondents said they maintained employment through the pandemic, which has helped many homeowners avoid delinquency and prevented a broad-scale mortgage crisis.
"The pandemic has created many challenges but, in the case of delinquencies, the impacts have been relatively muted thanks to numerous government support programs and the sharp snapback in economic activity over the past several quarters," said Frank Martell, president and CEO of CoreLogic. "Looking forward, we expect a robust economy and near-zero interest rates to hold delinquency levels at reasonable levels."
"The rise in home prices has built a substantial home equity cushion for homeowners with a mortgage, reducing the risk of a foreclosure," said Dr. Frank Nothaft, chief economist at CoreLogic. "The CoreLogic Home Price Index recorded an annual increase of 17% in June. This price rise builds home equity. For most borrowers in forbearance, the equity gain means they'll still have some remaining -- even if missed payments are added to their loan balance."
U.S. State and Metro Takeaways