Mortgage delinquencies down

The number of Utah homeowners who are delinquent on their mortgages continues to drop, according to a new report from property information and analytics firm CoreLogic. In the Salt Lake City market, 2.9 percent of mortgages were delinquent by at least 30 days in May, the Loan Performance Insights Report from CoreLogic said. In May 2016, the same report showed that 3.6 percent of Utah mortgages were delinquent.

By comparison, the nationwide delinquency rate in May stood at 4.5 percent, down 0.8 percent from May 2016 when the rate was 5.3 percent. The CoreLogic numbers include those mortgages in foreclosure.

Salt Lake City mortgages in serious delinquency (90 days or more past due) totaled 1.0 percent in May compared with 1.4 percent in May 2016. The foreclosure inventory rate for this May was 0.2 percent compared with 0.3 percent a year earlier.

{mprestriction ids="1,3"}Nationwide, the serious delinquency rate was 2 percent, unchanged from April 2017 and down from 2.6 percent in May 2016. The 2 percent serious delinquency rate in April and May this year was the lowest since November 2007, when it was also 2 percent.

Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market, CoreLogic said. To comprehensively monitor mortgage performance, CoreLogic examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

“Strong employment growth and home price increases have contributed to improved mortgage performance,” said Frank Nothaft, chief economist for CoreLogic. “Early-stage delinquencies are hovering around 17-year lows and the current-to-30-day-past-due transition rate remained low at 0.8 percent.”

“However, the same positive economic conditions helping performance have also contributed to a lack of affordable supply, creating challenges for homebuyers,” Nothaft said.

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.8 percent in May compared with 0.9 percent in May 2016, a 0.1 percentage point decrease year over year. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent and it peaked in November 2008 at 2 percent.

“A prolonged period of relatively tight underwriting criteria has driven delinquencies down to pre-crisis levels across many parts of the country,” said Frank Martell, president and CEO of CoreLogic. “As pressure to relax underwriting standards increases, the industry needs to proceed carefully and take progressive, sensible actions that protect hard-fought improvements in mortgage performance.”{/mprestriction}