BusinessWire reports that the percentage of mortgages in some stage of delinquency declined slightly between May 2017 and May 2017, according to a report from Irvine, California–based CoreLogic. The research firm says that 4.2 percent of mortgages were in some stage of delinquency (defined as being 30 or more days past due, including foreclosures) this May vs. 4.5 percent in May 2017, a 0.3 percent decline.
Additionally, the firm reports that as of May 2018, the foreclosure inventory rate — a metric that measures the share of mortgages in some stage of the foreclosure process — was 0.5 percent, down 0.2 percentage points from 0.7 percent in May 2017. This figure was the lowest for any month since September 2006, when it was also 0.5 percent, and it was the lowest for May since 2006, says CoreLogic.
Also on a positive track is the rate for early-stage delinquencies — defined as 30 to 59 days past due — which was 1.8 percent in May 2018, down from 1.9 percent in May 2017, CoreLogic reports. The firm says measuring early-stage delinquency rates is important for analyzing the health of the mortgage market.
Meanwhile, the share of mortgages that were 60 to 89 days past due in May 2018 was 0.6 percent, unchanged from May 2017, according to CoreLogic. The serious delinquency rate — defined as 90 days or more past due, including loans in foreclosure — was 1.8 percent in May 2018, down from 2 percent in May 2017. The May 2018 serious delinquency rate was the lowest for that month since 2007, when it was 1.6 percent, the firm reports.
Dr. Frank Nothaft, chief economist for CoreLogic, said in the firm’s report, “While the strong economy has nudged serious delinquency rates to their lowest level in 12 years, areas hit by natural disasters have had increases. The tragic wildfires in the West will likely lead to a spike in delinquencies in hard-hit neighborhoods.”
The report goes on to say that in California, where current delinquency rates are well below the national level, the regions impacted by recent wildfires are becoming more susceptible to mortgages entering some stage of delinquency as the fires continue to burn. According to a recent Carr Fire analysis by CoreLogic, the 2018 season is outpacing 2017 with more than 292,000 acres burned this year thus far. The Carr Fire outside the city of Redding and the French Gulch community presented the greatest risk to homeowners, with CoreLogic estimating a total of $3.5 billion potential reconstruction costs in that area.
Frank Martell, president and CEO of CoreLogic, said in the report that Florida and Texas, being the states hit hardest by last year’s hurricane season, stand in contrast to other states, comparing unfavorably to the rest of the country when it comes to serious delinquency rates. “