Delinquency rates have dropped year-over-year, according to the May 2017 Loan Performance Insights Report from CoreLogic. In May 2017, 4.5 percent of mortgages were in delinquency, compared to 5.3 percent in May 2016, a 0.8 percent decline.
CoreLogic notes the importance of measuring delinquency rates, especially early-stage rates, to determining the health of the mortgage market. In addition to delinquency rates, CoreLogic also measures transition rates, an indication of the percentage of mortgages moving from one stage to the next.
“Strong employment growth and home price increases have contributed to improved mortgage performance,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “Early-stage delinquencies are hovering around 17-year lows, and the current-to-30-day past due transition rate remained low at 0.8 percent. However, the same positive economic conditions helping performance have also contributed to a lack of affordable supply, creating challenges for homebuyers.”
The current-to-30-day past due transition rate of 0.8 percent is a slight drop year-over-year from May 2016’s rate of 0.9 percent.
The foreclosure inventory has dropped year-over-year as well, falling from 1 percent in May 2016 to 0.7 percent in May 2017. The rate for early-stage delinquencies, defined as 30-59 days past due, was 1.9 percent in May 2017, down from 2 percent in May 2016. The share of mortgages that were 60-89 days past due in May 2017 was 0.63 percent, down slightly from 0.66 percent in May 2016. In addition, CoreLogic reports that the serious delinquency rate (90 days or more past due) currently sits at 2 percent, the lowest percentage since November 2017.
“A prolonged period of relatively tight underwriting criteria has driven delinquencies down to pre-crisis levels across many parts of the country,” said Frank Martell, President and CEO of CoreLogic. “As pressure to relax underwriting standards increases, the industry needs to proceed carefully and take progressive, sensible actions that protect hard-fought improvements in mortgage performance.”