Serious delinquency rate dips further below June 2020 level

Mortgages late on their payments by 90 days or more in May are at their lowest point since the June 2020 pandemic-related spike, CoreLogic reported Tuesday.

At 3.2%, serious delinquencies and foreclosures were 0.2 percentage points below where they were 11 months ago, when the 90-plus days late rate was 3.4%, according to the latest Loan Performance Insights report. The serious delinquency rate was 3.3% in April and 1.5% in May 2020.

The movement in SDRs reinforces other indicators suggesting that national delinquency rates are continuing to moderate.

“Many indicators are showing improvement, including some returning to pre-pandemic lows. Those are encouraging signs that many consumers will ultimately be able to make their mortgage payments,” said Selma Hepp, deputy chief economist at CoreLogic, in an interview.

The rate at which loans have transitioned from current to 30 days late was 0.7% in May and 0.5% in April, she noted, citingone example where delinquency gains seen during the pandemic have been erased. The current to 30-days-late transition rate hasn’t been that low since January 2020, when it was 0.6%.

However, deeper levels of distress still exist regionally, particularly in areas where pandemic-related concerns have been compounded by natural disasters, economic woes, or all three concerns, she noted. Because of this, delinquencies are likely to continue to rise in areas like the Mississippi Delta and the Gulf Coast of Texas, which have experienced both hurricane damage and elevated unemployment in the oil extraction and mining sector. Mississippi, for example, had the second highest 30-day delinquency rate in the nation at 7.3% in May. Louisiana, another state in the same region, had the highest 30-day delinquency rate in the nation that month at 7.9%.