For the month of May, 2.6 percent of all mortgages in the U.S. were in some stage of delinquency, a 0.1 percent decrease from the levels seen a year before, according to data from CoreLogic.
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For the month of May, 2.6 percent of all mortgages in the United States were in some stage of delinquency, a 0.1 percent decrease from the levels seen a year before and a 0.2 percent decrease from April, according to data released Thursday by CoreLogic.
The relative health of the mortgage market has been bolstered by high employment, with the U.S. unemployment rate ranging between 3.4 and 3.7 percent over the past 16 months.
“A very strong job market continues to help borrowers pay their mortgages on time,” said Molly Boesel, principal economist at CoreLogic. “The U.S. economy has added nearly 25 million jobs since April 2020 and about 4 million in the last year. As a result, the unemployment rate has ranged from 3.4% to 3.7% for the past 16 months. While the job market may slightly weaken over the next year, we project that mortgage performance will remain healthy.”
The delinquency rate differed on a state-by-state basis for May, with large increases in delinquency seen in Idaho, Indiana, Michigan, Mississippi and Pennsylvania, each of which recorded 0.2 percent increases.
Three metropolitan areas posted increases in serious delinquency rates — defined by CoreLogic as households that are 90 days or more late on mortgage payments — with both Cape Coral-Fort Myers, Florida, and Punta Gorda, Florida, increasing by 0.7 percent in May and Elkhart-Goshen, Indiana, increasing by 0.2 percent.
As the Federal Reserve continues to hike interest rates, recent data has shown that nearly 92 percent of homeowners with a mortgage have a mortgage rate below 6 percent and nearly a quarter of homeowners have a mortgage rate below 3 percent, meaning the vast majority of homeowners are not affected by the mortgage rate increases of the last year.
Mortgage delinquencies ballooned in 2021 as the coronavirus pandemic caused unemployment to surge. Anti-foreclosure protections kept countless Americans from losing their homes, and delinquency rates gradually dropped off throughout 2022 as the economy reopened.
“May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit,” Boesel said. “Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020.”