CoreLogic: Declining foreclosure rates signal strengthening economy

Despite 2017's hurricanes, delinquency rate falls

Despite the damaging impact from 2017's turbulent hurricane season, the national mortgage delinquency rate declined in February, according to the latest Home Price Index report from CoreLogica global property information, analytics and data-enabled solutions provider.

Nationally, 4.8% of mortgages remained in some stage of delinquency, as in those 30 days or more past due, including homes in foreclosure, in February. This is down 0.2% from February 2017 when 5% of all homes with a mortgage were in a stage of delinquency.

The foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, decreased 0.2 percentage points from last year’s 0.8% to 0.6% in February of this year. The foreclosure inventory rate has remained at 0.6% since August of 2017, and represents the lowest level since June 2007.

The rate of early-stage delinquencies, those 30 to 59 days past due, rose 0.1 percentage point from January 2018 to 2.1% in February. But remains unchanged from February 2017.

While many areas in the market are not significantly affected, areas like Florida, Puerto Rico, and Texas, are still experiencing serious delinquencies.

“Last year’s hurricanes continue to have an effect on loan performance in affected markets, showing up in statewide data,” CoreLogic Chief Economist Frank Nothaft said.

“Serious delinquency rates in February were 50% higher than in August 2017 in Texas, and nearly double in Florida, even though the wind and flood damage was primarily in coastal markets,” Nothaft said. “In Puerto Rico, the damage was widespread. Serious delinquency rates were up five-fold over the August-to-February period, with a significant increase in all metropolitan areas there.”

The share of mortgages 60 to 89 days past due in February was 0.7%, down from 0.8 percentage points from 0.7% in both January 2018, and unchanged 0.7% in February 2017.

The serious delinquency rate, or loans 90 days or more past due, was 2.1% in February 21018, unchanged from January and down from 2.2% points in February 2017 and the lowest rate since February 2007.

Although the housing market has seen some devastation, homebuilders signal a strengthening economy.

“Overall delinquency rates fell in the U.S. over the past year, driven by a long run of stringent underwriting, higher employment and wages,” said President and CEO of CoreLogic Frank Martell. “At the same time, our CoreLogic U.S. Home Price Index showed a 6.4% increase in home-price appreciation for the 12 months, which ended in February 2018. These factors bode well for the fortunes of both homeowners and mortgage servicers.”

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