July’s 120-day delinquencies were double Great Recession’s peak
While overall mortgage delinquencies slowly descend from early pandemic highs, serious delinquencies — especially loans past 120 days due — jumped in July, according to CoreLogic.
Loans past 120 days delinquent surged to 2.4% in July, up from 1.1% in June and 1% the year before.
“This was the highest rate in more than 21 years and double the December 2009 Great Recession peak,” said Frank Nothaft, chief economist at CoreLogic. “The spike in delinquency was all the more stunning given the generational low of 0.1% in March.”
Serious delinquencies — loans 90 days or more past due, including foreclosures — climbed to 4.1%, their highest point since April 2014, according to CoreLogic. This is compared with June’s 3.8% and July 2019’s 1.3%. In June, serious delinquencies doubled annually and could double again by 2022 without further government action.
July’s overall delinquency rate decreased to 6.6% from 7.1% in June and 7.3% in May, but stands way above the 3.8% rate for July 2019.
The rate of 30 to 59-day early-stage delinquencies continued falling, going to 1.5% in July from 1.8% in both June and the year before. The rate for 60 to 89-day delinquencies dropped to 1% from 1.8% month-over-month, while rising from 0.6% year-over-year.
Economic instability, especially in certain sectors and regions of the country, could keep delinquencies inflated throughout the foreseeable future.
“Given the unsteadiness of the job market, many homeowners are beginning to feel the compounding pressures of unstable income and debt on personal savings buffers, creating a heightened risk of falling behind on their mortgages,” Frank Martell, president, and CEO of CoreLogic said in the report.
At the state level, New York had the highest rates of delinquency and serious delinquency in July at 10% and 7%, respectively. Louisiana followed with rates of 9.7% and 5.9% with New Jersey closely behind at 9.6% and 6.6%, respectively. At the low end of the spectrum, Idaho posted the bottom delinquency rate of 3.4% and a serious delinquency rate of 1.8%, trailed by South Dakota’s 3.6% and 2%, and Wisconsin’s 3.7% and 2.1%.
The highest foreclosure rates came in New York at 1.1%, Maine at 0.8% and Hawaii ay 0.7%. Meanwhile, 14 states tied at 0.1% for the lowest.