The national mortgage delinquency rate in the first quarter of 2013 dropped to 4.56%, a 21% drop versus last year. From last quarter, the mortgage delinquency rate fell 12%, according to TransUnion.
Both on a year-over-year and quarter-over-quarter basis, this is the best improvement in mortgage delinquency since TransUnion started collecting its data in 1992.
"We are pleased to report that the national mortgage delinquency rate experienced its first major decline since the advent of the housing crisis," said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit.
He added, "We certainly expected improvement this quarter, as the housing sector is in recovery, but the magnitude of the improvement was unexpected."
All 50 states and the District of Columbia saw improvement in their mortgage delinquency rates year-over-year. Arizona and California led the improvement, with a 37.9% and 36.6% drop, respectively.
Drilling even deeper, 91% of MSAs saw a yearly drop in their mortgage delinquency rate. In the previous quarter, 81.4% of MSAs had a yearly drop in their mortgage delinquency rate.
"The housing sector as a whole has definitely been improving with prices up, negative equity down and rates staying low," Martin said. "That seems to have helped borrowers this quarter, some of whom have been delinquent for a rather long time, work their way out of the system at a faster pace."
It is expected that the mortgage delinquency rate to continue its downward spiral in the second quarter, finishing near 4.5%.
"There is no reason to believe the decline in mortgage delinquencies will not continue," said Martin. "All housing data point to further improvements in the delinquency rate, though as in the past few years, this also will hinge on how quickly older vintage loans clear through the system. We do not know if the first quarter was a blip, or if it’s the beginning of a more rapid decline."
The CEO of the Mortgage Bankers Association, David Stephens also discussed the issue on Bloomberg TV.