Mortgage delinquency trends are concerning, Corelogic says

Troubling trends in mortgage delinquencies are emerging, as September and third quarter data shows continued upward movements, Corelogic said.

Its latest Loan Performance Insights Report shows an 0.2 percentage point year-over-year increase in the total delinquency rate at the end of September to 3%.

This makes four months in a row where the annual rate of late payments increased.

A granular look at the data notes that while delinquencies remain low relative to the Great Recession era, several items are giving Corelogic economists pause.

For example, "70% of metropolitan areas showed an increase in the overall delinquency rate from a year earlier, and more concerning, 30% of metropolitan areas showed an increase in the serious delinquency rate," said Molly Boesel, senior principal economist, in a press release.

"As recently as the second quarter of 2024, only 5% of metros recorded an increase in serious delinquency rates," Boesel continued. "The increase in the serious delinquency rate shows that borrowers who enter the delinquency pipeline are having difficulty catching up on their late payments."

For September, 38 states and 267 metro areas (of the 384 Corelogic had data for) recorded an increase versus 2023 in overall delinquency rates; 116 of them also had a higher seriously delinquent rate.

While the 90 day-plus (including loans in foreclosure) rate nationwide was unchanged at 0.9% compared with the prior year, a subset of that group, loans late between 90 and 119 days were up to 0.3% from 0.2% in September 2023.

Shorter-term default rates were also higher year-over-year.

The rate for loans where the borrower was between 30 and 59 days late for September was at 1.6%, up from 1.5% in the same month last year.

For the same time frame, mortgages past due between 60 and 89 days was up to 0.5% from 0.4%.

Meanwhile, the transition rate, the share that moved to 30 days late from current stayed unchanged at 0.8%.

This report does not cover any impact of Hurricane Helene, which struck late in September. However, ICE Mortgage Technology's December Mortgage Monitor found over 40,000 borrowers in areas struck by Helene and the following month's Hurricane Milton, became delinquent on their loans.

On Dec. 6, the Department of Housing and Urban Development extended its foreclosure moratorium for Federal Housing Administration-insured borrowers affected by those storms.

The government-sponsored enterprises offer a year-long forbearance for those mortgages they own.