While the pandemic has sparked economic fears, the housing market started from a position of strength: According to CoreLogic, Jan. foreclosures fell to a 20-year low.
Mortgage delinquencies in January fell to their lowest level in more than 20 years, driven by a strong job market and low interest rates.
Some 3.5% of home loans were in some stage of delinquency, compared to 4% in January 2019, according to CoreLogic.
Early-stage delinquencies declined to 1.7% from 1.9% over the same period. The share of mortgages 60 to 89 days past due in January was 0.6%, down from 0.7% during the same month last year. And the serious delinquency rate (90 days or more past due, including loans in foreclosure) was 1.2%, down from 1.4%. It was the lowest serious delinquency rate since 1% in April 2000.
Meanwhile, the foreclosure inventory rate was 0.4%, unchanged from January 2019. That tied the lowest monthly rate since at least January 1999.
“After some initial cushioning from equity buffers, lower mortgage interest costs and government support and forbearance programs, we expect delinquency rates to jump significantly throughout the year as the economic toll from COVID-19 becomes more evident,” says CoreLogic President and CEO Frank Martell.
Martell says not all cities will feel the same effects.
“It is likely that areas of the country that have local economies driven by energy, transportation and media and entertainment will lead the way in delinquencies,” he says. The ultimate extent of the higher delinquencies will depend on how quickly the broader economy opens up again and employment levels rebound – both of these factors are uncertain at this time.”
Source: National Mortgage News (04/14/20) Centopani, Paul