The number of mortgage delinquencies continued to rise in September
September marked a steady decline in mortgage performance since the end of the third quarter of 2023. About 3% of all mortgages were in some form of delinquency in September 2024 – an increase of 20 basis points year over year, according to a KernLogic report published this week.
According to CoreLogic’s September 2024, this is the fourth consecutive month of national delinquency increasing year over year. Loan Performance Insights Report. The report showed upward growth in all delinquency categories – including early, adverse and severe delinquencies.
The report does not include data on secondary liens. All rates are measured based on homes with outstanding mortgage balances. CoreLogic said it covers 75% of U.S. foreclosure data.
Early-stage delinquencies (30 to 59 say delinquent) increased 10 basis points over the past year and stood at 1.6% of all loans in September. Adverse delinquencies (60 to 89 days past due) also increased by 10 basis points, for a 0.5% share. Serious delinquencies (at least 90 days past due) remained unchanged at 0.9% – although that rate is well below the peak of 4.3% in August 2020, CoreLogic noted.
Despite rising delinquency rates, the number of mortgages in foreclosure has not decreased from 0.3% in September 2023. The transition rate for mortgages moving from current to early delinquencies was 0.8% – also unchanged from September 2023 .
CoreLogic believes that US defaults in September were quite low compared to previous years. But delinquencies in some metropolitan areas could be concerning.
“Delinquencies remain low, especially compared to those seen during the Great Recession. However, 70% of metropolitan areas showed an increase in overall delinquency rates from a year earlier, and more worryingly, 30% of metropolitan areas showed an increase in serious delinquency rates,” said Molly Boesel, senior chief economist at CoreLogic , in a statement.
Boesel’s first concern concerns the 267 of 384 metropolitan areas where total delinquencies have increased year-over-year.
Pine Bluff, Arkansas, saw the largest increase, up 1.1% year over year. It is followed by Houston (+1%); New Orleans (+0.8%); Altoona, PA (+0.8%); Hammond, Louisiana (+0.8%); and Houma-Thibodaux, Louisiana (+0.8%).
Severe increases in payment defaults affected 116 metro areas last year. These areas were led by Kahului-Wailuku-Lahaina, Hawaii (+0.8%); Houston (+0.6%); and Beaumont-Port Arthur, Texas (+0.4%).
CoreLogic also noted that 38 states saw an overall increase in delinquencies since September 2023, with Louisiana (+0.6%) and Texas (+0.4%) leading the way.
The theme of this report is consistent with similar stories in the industry.
ICE mortgage technology reported a national default rate of 3.48% in September, an increase of 14 basis points from a year earlier. The Association of Mortgage Bankers (MBA) reported an annual increase in the default rate in the third quarter, which stood at 3.92% for properties of one to four units.
