Impact of recent job losses could cause delinquency rates to creep up.
CoreLogic said mortgage delinquencies fell in February from January but rose slightly from a year ago. The company’s monthly Loan Performance Insights Report said 3% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure) in February, representing an 0.4 percentage point decrease from 3.4% a year ago and an 0.2 percentage point increase from January. Early-Stage Delinquencies (30 to 59 days past due) were 1.4%, unchanged from a year ago and up from 1.3% in January. Molly Boesel, principal economist with CoreLogic, noted the national mortgage delinquency rate has barely changed year over year since spring 2022, indicating a fairly stable economy in which most borrowers are able to pay their mortgages on time. Similarly, the U.S. foreclosure rate has held steady at 0.3% for a year. “Despite a small monthly increase in the share of mortgage payments that were one month late in February, early-stage delinquencies remained unchanged year over year,” Boesel said. “February’s early-stage delinquency rate was historically low and primarily driven by a strong job market. However, the possibility of a recession that would raise the U.S. unemployment rate could slightly erode the current strong mortgage performance situation in the coming months.” Boesel added while the unemployment rate remained near a pre-pandemic low in March, it is possible that mortgage delinquency rates could begin to creep up later this year, as the impact of recent job losses begin to affect the numbers several months later.