High employment rates and growing home equity have put home delinquency rates at an 11-year low, according to a new analysis by CoreLogic on Tuesday.
The report, which measured the number of homeowners who were late on their mortgage payments by 30 days or more, found a national delinquency rate of 4.3 percent in March, down 0.5 percent from the previous month and 0.1 percent when compared to March 2017.
The rate of foreclosed properties — or those seized due to nonpayment — also fell 0.2 percent, to 0.6 percent, nationwide. Such a low foreclosure rate has not been seen since June 2007, a positive milestone over the past 11 years.
“Unemployment and lack of home equity are two factors that can lead to borrowers defaulting on their mortgages,” said Dr. Frank Nothaft, chief economist for CoreLogic, in a statement. “Unemployment is at the lowest level in 18 years, and for the first quarter, the CoreLogic Equity Report revealed record levels of home equity growth with equity per owner up $ 16,300 on average for the year ending March 2018.”
Two things that remained the same from last year were the early-stage (30 to 59 days late) and mid-stage (60 to 89 days late) delinquency rates, according to the analysis. The former remained at 1.7 percent while the latter is still at 0.6 percent. Serious delinquencies, in which the homeowner is more than 90 days behind on mortgage payments, are down to 1.9 percent compared to 2.1 percent during the same period last year.
But while the low delinquency rate is good news for homeowners, many Americans still struggle after a year of frequent natural disasters and a continued upward recovery from the 2009 financial crisis.
“As we enter the summer, the risk of hurricane and wildfire damage to homes increases as does the risk of damage-related loan default,” said Frank Martell, president and CEO of CoreLogic, in a statement. “Last year’s hurricanes and wildfires continue to affect today’s default rates. Serious delinquency rates are more than double what they were before last autumn’s hurricanes in Houston, Texas, and Naples, Florida. The serious delinquency rates have also quadrupled in Puerto Rico.”