IRVINE, Calif.–Foreclosure rates continue to decline nationally and are at their lowest point in a decade.
The latest Loan Performance Insights Report from CoreLogic shows that nationally, 5% of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in September 2017. This represents a 0.2 percentage point year-over-year decline in the overall delinquency rate compared with September 2016 when it was 5.2%, the company said.
As of September 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.6%, down from 0.8% in September 2016, according to CoreLogic.
“Both August and September of this year experienced the lowest foreclosure inventory rate since June 2007 when it was also 0.6%, and the September foreclosure inventory rate was the lowest for the month of September in 11 years when it was 0.5% in September 2006,” the report found.
To monitor mortgage performance comprehensively, CoreLogic said it examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.
According to the Loan Performance Insights Report, the rate for early stage delinquencies, defined as 30-59 days past due, was 2.4% in September 2017, up 0.3 percentage points from 2.1% in September 2016. The share of mortgages that were 60-89 days past due in September 2017 was 0.7%, unchanged from September 2016. The serious delinquency rate, those that are 90 days or more past due, declined 0.4 percentage points year over year from 2.3% in September 2016 to 1.9% in September 2017. The 1.9% serious delinquency rate in June, July, August and September of this year marks the lowest level for any month since October 2007 when it was also 1.9%, and is also the lowest for the month of September since 2007 when the serious delinquency rate was 1.8%, CoreLogic said.
“September’s early stage delinquency rate increased by 0.3% from a year ago, the largest increase since June 2009. This does not reflect a deterioration in credit, but rather the impact of the hurricanes in Texas, Florida and Puerto Rico,” said Dr. Frank Nothaft, chief economist for CoreLogic, in a statement. “September’s early stage delinquency transition rate rose to 2.6% in Texas and it rose to 3.2% in Florida, which is higher than the 1% that’s typical for both states. Texas and Florida’s early stage delinquency transition rates in September are much lower than New Orleans in September 2005 when the transition rate reached 17.4% as a result of Hurricane Katrina.”
Since early stage delinquencies can be volatile, CoreLogic said it also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 1.3% in September 2017, up from 0.9% in September 2016. The September rate was the highest for any month in nearly three years, since November 2014 when it was 1.4%. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2% and it peaked in November 2008 at 2%, the company said.