Four percent of U.S. mortgages were in some stage of delinquency in August, according to CoreLogic’s Loan Performance Insights report. That’s down 2.6 percentage points year over year for the lowest mortgage delinquency rate since the COVID-19 pandemic began.
Rates for every stage of delinquency were down in August. The rate for early-stage delinquencies (loans 30 to 59 days past due) was 1.1%, down from 1.5% one year earlier. The share of loans 60 to 89 days past due was 0.3%, down from 0.8% in August 2020, while serious delinquencies (mortgages 90 days or more past due, including loans in foreclosure) comprise 2.6% of all loans, down from 4.3% one year earlier.
The foreclosure inventory rate was 0.2%, the lowest it’s been in more than 22 years, dropping from 0.3% in August of last year.
Frank Martell, president and CEO of CoreLogic, said that government support during the COVID-19 health crisis has helped keep delinquencies at bay.
“The unprecedented fiscal and monetary stimuli that have been implemented to combat the pandemic are pushing housing prices and home equity to record levels,” said Martell. “This phenomenon is driving down delinquencies and fueling a boom in cash-out refinancing transactions.”
Still, despite the rosy headline figures, CoreLogic cautioned that many borrowers still aren’t out of the woods when it comes to keeping their mortgages afloat. Overall delinquencies still remain above the early 2020 pre-pandemic rate of 3.6%, while the share of borrowers behind on their payments by at least six months was 2% in August — half of the overall delinquency rate.
“The decline in the overall delinquency rate to its lowest since the onset of the pandemic is good news, but it masks the serious financial challenges that some of the borrower population has experienced,” said Frank Nothaft, CoreLogic’s chief economist.
“In the months prior to the pandemic, only one in five delinquent loans had missed six or more payments. This August, one in two borrowers with missed payments were behind [by] six or more monthly installments, even though the overall delinquency rate had declined to the lowest level since March 2020.”