Continued Decline in Mortgage Delinquencies a Positive for Housing Market

Filed under: Market Comentary

mort delinquency decMore great news in the mortgage industry came out this past week as the mortgage delinquency rate hit the lowest in five years and actually dropped below 4% for the first time since 2008!

TransUnion’s latest ‘mortgage delinquency report’ said that the rate of borrowers 60 days or more delinquent on their mortgages ended the fourth quarter of 2013 at 3.85%, making it the eighth consecutive quarter of recorded declines. The 2013 fourth quarter numbers fell from 2013’s third quarter of 4.09%, and has now dropped 24% from one year earlier.

TransUnion attained this data from its proprietary Industry Insights Report, which is a quarterly overview summarizing data, trends, and perspectives on the U.S. consumer lending industry.

This data definitely shows that more homeowners can now salvage their homes and avoid foreclosure.

Another measure of good news is that every state and the District of Columbia saw a decrease in their mortgage delinquency rate between the fourth quarter of 2012 and the fourth quarter of 2013. And, in every state except New Jersey and New York, these declines were actually in double digits.

According to one report, this news is a positive trend due to what is currently happening across the country, such as the government taking action to raise the minimum wage, the fact that unemployment is slowly declining, retirement accounts being higher due to new highs in equities, and jobless claims declining.

TransUnion’s head of financial services Steve Chaouki said, “Due to recent spikes in interest rates and tight lending standards, new account originations declined significantly in recent quarters. ”

Chaouki also added, ” As older mortgages continue to slowly exit the system, the industry will experience continued declines in mortgage overall delinquencies.”

According to the report, TransUnion is predicting that the downward trend will definitely continue into the first quarter of 2014, with mortgage delinquencies dropping to approximately 3.7% by the end of March, 2014.

If you are interested in anything to do with the housing market or have any questions about buying, refinancing, or selling your home, please contact me and we can discuss all of your concerns.



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