Mortgage delinquency rates plunge to lowest levels since GFC
Colorado and Alaska have the fewest delinquencies and New Jersey and Mississippi have the highest rates.
The national rate of seriously delinquent mortgages has fallen to its lowest level since the global financial crisis of 2008, with the fewest occurring in Colorado and Alaska, according to new data released this week.
The Consumer Financial Protection Bureau (CFPB) launched a new Mortgage Performance Trends tool which provides up-to-date tracking data on a range of different mortgage delinquency rates across the United States.
A delinquent mortgage is a home loan for which the borrower has failed to make required payments. If the borrower can’t make these payments within a certain period, the lender may begin foreclosure proceedings.
The national rate of seriously delinquent mortgages peaked at 4.9% in 2010. As of March 2017, the rate had dropped to just 1.1%, the lowest recorded level since the global financial crisis (GFC) of 2008.
In a state-by-state breakdown, Colorado (0.5%) and Alaska (0.5%) have the fewest serious delinquencies.
New Jersey (2.1%) and Mississippi (2.1%) have the highest rates of delinquencies of more than 90 days. For delinquencies less than 90 days, Mississippi (4.3%) has the highest rate, while Washington (1%) has the lowest.
To offer some context, at the peak of the financial crisis in 2008, both California (7.5%) and Arizona (7.6%) had incredibly high rates of serious delinquencies. Both now enjoy rates at below 1%. In Nevada (10.7%) more than one in ten mortgages were serious delinquent. Now the state’s rate sits at 1.2%, near the national average.
The Mortgage Performance Trends tool sources information from the National Mortgage Database, launched by the CFPB and Federal Housing Finance Agency in 2012 to expose mortgage and housing trends.
30-89 day mortgage delinquency rate can be an early indicator of mortgage market health. 90-day mortgage delinquency rates can reveal more severe economic distress.
“Measuring the number of consumers who have fallen behind on their mortgage payments is a telling barometer of the health of mortgage markets locally and nationally,” CFPB director Richard Cordray said.
A recent research report has discovered a record-low level of housing supply and increasing price growth across the United States is restricting the number of first-home buyers entering the real estate marketplace.
After five years of study, the CFPB is striking back against “debt traps”, regulating against the most harmful portion of quick and easy payday loans. However, consumers still have options to take out short-term loans.