U.S. Mortgage Delinquency Rates Drop in Late 2021

U.S. Mortgage Delinquency Rates Drop in Late 2021

Residential News » Irvine Edition | By David Barley | February 8, 2022 8:42 AM ET

Based on CoreLogic's latest monthly Loan Performance Insights Report for November 2021, 3.6% 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 2.3-percentage point decrease compared to November 2020, when it was 5.9%.

To gain a complete view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency. In November 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 November 2020.
  • Adverse Delinquency (60 to 89 days past due): 0.3%, down from 0.6% in November 2020.
  • Serious Delinquency (90 days or more past due, including loans in foreclosure): 2%, down from 3.9% in November 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 November 2020. This remains the lowest foreclosure rate recorded since 1999.
  • Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, down from 0.8% in November 2020.

For the first time since the onset of the pandemic, national overall delinquency dropped below the March 2020 level of 3.6%, a sign that mortgage performance is following the nation's income growth. At the same time, foreclosure rates remain at historic lows as borrowers have been able to lean into the equity generated by a year of record-breaking home price growth. These factors combined have helped borrowers weather the lasting economic impacts brought on by the pandemic and avoid falling behind on payments or losing their homes.

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

"Nonfarm employment rose 6.45 million during 2021, helping to rebuild income for families under financial stress during the pandemic," said Dr. Frank Nothaft, chief economist at CoreLogic. "Income growth has helped to reduce past-due rates and home equity build-up has reduced the likelihood of a distressed sale for families that experience financial challenges."

State and Metro Takeaways:

  • In November 2021, all states logged year over year declines in their overall delinquency rate. The states with the largest declines were: Nevada (down 3.8 percentage points); New Jersey (down 3.6 percentage points); Hawaii (down 3.5 percentage points); Florida (down 3.4 percentage points); and New York (down 3.2 percentage points).
  • All except one U.S. metropolitan area posted at least a small annual decrease in their overall delinquency rate. The one area with an annual increase in November 2021 was Houma-Thibodaux, Louisiana (up 0.4 percentage points). Houma was impacted by Hurricane Ida in the fall, but its November delinquency rate is an improvement from October as the area works to recover.

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