Housing

Mortgage Delinquencies Decline in October as Hurricane Damage Fades

Paul Ausick

Published: January 9, 2018 9:15 am

Last Updated: January 12, 2020 4:40 am

The share of home mortgage loan payments that are 30 days or more past due fell from 5.2% in October 2016 to 5.1% in October 2017. The foreclosure inventory rate fell from 0.8% to 0.6% in the same period.

The share of mortgages that transitioned from current to 30 days past due was 1.1% in October 2017, up from 1% in October 2016. This year’s rate is slightly lower than the transition rate of 1.2% just before the housing crisis struck, but still well below the peak rate of 2% in November 2008.

The data were reported Tuesday by CoreLogic in its Loan Performance Insights report. Early-stage delinquencies, defined as 30 to 59 days past due, were trending higher in October 2017 at 2.3% compared with the year-ago rate of 2.2%. The share of mortgages that were 60 to 89 days past due in October 2017 was 0.9%, an increase of 0.2 points compared with last year’s rate. According to CoreLogic, measuring early-stage delinquency rates is important for analyzing the health of the mortgage market.

CoreLogic’s chief economist, Dr. Frank Nothaft, said:

After rising in September, early-stage delinquencies declined by 0.1 percentage points month over month in October. The temporary rise in September’s early-stage delinquencies reflected the impact of the hurricanes in Texas, Florida and Puerto Rico, but now the impact from the hurricanes is fading from a national perspective. While the national impact is waning, the local impact remains. Some Florida markets continue to see increases in early-stage delinquency transition rates in October, reaching 5 percent, on average, in Miami, Orlando, Tampa, Naples and Cape Coral. Texas markets such as Houston, Beaumont, Victoria and Corpus Christi peaked at over 7 percent in September, but are on the mend and improving in October.

Frank Martell, president and CEO of CoreLogic, added:

While the national impact of the recent hurricanes will soon fade, the human impact will remain for years. For example, the displacement and rebuilding in New Orleans after Hurricane Katrina extended for several years and altered the character of the city, an impact that still remains today. The reconstruction of the housing stock and infrastructure impacted by the storms should provide a small stimulus to local economies. This rebuilding will occur against a backdrop of wage growth, consumer confidence and spending in the national economy which should continue to provide a solid foundation for real estate demand in the storm-impacted areas and beyond.

The states with the lowest 30-plus delinquency rate in October 2017 were North Dakota (2.0%), Colorado (2.1%), Montana (2.4%), Oregon (2.4%) and Washington (2.5%). The 30-plus delinquency rate was highest in Florida (9.7%), Mississippi (8.5%), Louisiana (8%), New York (6.9%) and Texas (6.8%).

Selected metro areas with the highest 30-plus delinquency rates in October were Miami (12.5%), Houston (10.9%) and New York City (6.6%). Selected metro areas with the lowest rates were San Francisco (1.7%), Denver (1.9%) and Los Angeles (2.8%).