The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally-adjusted rate of 4.63 percent of all loans outstanding at the end of the first quarter of 2018.
The delinquency rate was down 54 basis points from the previous quarter, and was eight basis points lower than one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The percentage of loans on which foreclosure actions were started during the first quarter was 0.28 percent, up three basis points from the last quarter, but down two basis points from one year ago.
“Mortgage delinquencies decreased from the previous quarter across all loan types – conventional, VA, and in particular, FHA – as the effects of the September hurricanes dissipated,” according to Marina Walsh, MBA’s Vice President of Industry Analysis.
“The strong economy, low unemployment rate, tax refunds and bonuses and home price appreciation were key factors that helped push delinquencies down in the first quarter. Of course, there are offsetting factors that may put upward pressure on delinquency rates in future quarters, including: a difficult recovery for some borrowers in hurricane-impacted states; the aging of loan portfolios; higher interest rates that limit a borrower’s rate-term refinance options; higher energy prices; stretching of housing affordability given limited supply; and the easing of credit overlays as mortgage market conditions have changed.”
Mortgage delinquencies dropped across all stages of delinquency in the first quarter of 2018 compared to the fourth quarter of 2017. The 30-day delinquency dropped 27 basis points from the previous quarter, while the 60-day and 90-day delinquency buckets dropped by 9 and 18 basis points respectively.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 1.16 percent, down 3 basis points from the fourth quarter of 2017 and 23 basis points lower than one year ago. This was the lowest foreclosure inventory rate since the third quarter of 2006. In addition to the strong economy and increasing home equity levels, extended storm-related foreclosure moratoria continue to play a factor in keeping foreclosure inventory at historic lows.
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.61 percent in the first quarter of 2018, a decrease of 30 basis points from last quarter, and a decrease of 15 basis points from last year.
This graph shows the percent of loans delinquent by days past due.
The percent of loans delinquent decreased in Q1, as “the effects of the September hurricanes dissipated”.
The percent of loans in the foreclosure process continues to decline, and is close to normal levels.