Mortgage delinquency rates in March fell below the 3% mark, reaching another historic low as a strong labor market and income growth drove down the number of property owners who are late on their mortgage payments.
About 2.7% of all mortgages in the U.S. were delinquent in March, dropping 2.2 percentage points from the 4.9% posted in March 2021, according to CoreLogic‘s latest loan performance report.
Other contributing factors to the decline were rising home prices and the resulting equity gains providing alternative options to those who may be coming out of forbearance or facing foreclosures, said CoreLogic’s report.
U.S. employers posted a record 11.5 million job openings and 6.7 million were newly hired in March, according to the Bureau of Labor Statistics. The unemployment rate of 3.6% in May remained unchanged for the third month in a row. The rate is the lowest since February 2020.
“The share of borrowers in any stage of delinquency was at an all-time low in the first quarter of 2022,” said Molly Boesel, principal economist at CoreLogic.
While the share of borrowers in any stage of delinquency was at an all-time low in the first quarter of 2022, Boesel expects distressed sales to rise over the coming year.
“More than one-third of delinquent mortgages remain six months or more past due on their payments,” she said. “While we may see an uptick in distressed sales over the coming year, historic home equity gains should keep these sales from reaching elevated levels.”
The serious mortgage delinquency rate, defined as being 90 days or more past due including loans and forbearance, was the highest among the five stages of delinquency at 1.4% in March, down from March 2021’s rate of 3.5%.
All 50 states posted annual declines in their overall mortgage delinquency rate. Louisiana had the highest rate of 5.1% in March, dropping 3 percentage points from March 2021. Mississippi followed with a mortgage delinquency rate of 4.8% and New York trailed with 4.3% in March this year.