The percentage of borrowers late on their mortgage experienced one of the most pronounced drops in nearly two decades in March, according to Black Knight's latest First Look report.
The 53 basis-point decline drove delinquencies, excluding foreclosures, below 3% for the first time to 2.92% from
Black Knight attributed the improvement to seasonal factors and what are generally high levels of home equity in mortgaged properties.
"This is primarily due to tax returns and bonuses helping troubled homeowners right-size themselves, with March historically seeing the most downward pressure on delinquency rates as a result," said Andy Walden, vice president of enterprise research, in an email.
"This year, every state saw delinquencies decline, with the month's drop at the national level marking the second largest such decline we've seen in the past 17 years," he added.
Although arrears are lower in all states, some new mortgages remain under pressure.
"There are still pockets of risk worth noting —
Foreclosure sales increased both on a consecutive month and annual basis by 4.59% and 24.64%, respectively, to 7,500.
Starts rose from February by 9.03% to 32,000. However, they were down 5.69% from March 2022.
The monthly prepayment rate of 0.50% also was another notch higher on a consecutive month basis in March but lower than 12 months ago. Prepays were up 44.42% from February, but down 1.41% from March of last year, following
The uptick in prepayments will likely continue through early June.
"While spring homebuying typically pushes sales-related prepays upward, such seasonality will be that much more noticeable this year as it's currently driving more than half of all activity," Walden said.
