Despite some economic uncertainty, the overall delinquency rate remained “near a historic low” in November, falling for the 20th consecutive month, per a report by CoreLogic published Thursday.
A mere 2.9% of all mortgages in the nation were in some stage of delinquency in November, a 0.7% decrease year-over-year, according to the data vendors’ loan performance insights report.
The foreclosure rate was also at a record low of 0.3% two months ago.
By category, early-stage delinquencies (30 to 59 days past due) slightly grew to 1.4% in November, up from 1.2% in the same month in 2021. The adverse delinquency rate (60 to 89 days past due) slightly ticked up to 0.4% up from 0.3% in 2021, while the share of serious delinquencies (90 days or more past due) dipped to 1.2% in November 2022, down from 2% year-over-year.
The report also found that all 50 states posted annual declines in overall delinquency rates in November, with Louisiana (down 1.9%) , Alaska (down 1.6%) and Hawaii (down 1.3%) reporting the largest declines.
And though the overall delinquency rate has declined, late borrower payments slightly grew in November, with 18 metro areas reporting an increase, up from six metro areas in October.
The top three areas for mortgage delinquency gains year- over- year were Cape Coral-Fort Myers, Florida (up 3.1%), Punta Gorda, Florida (up 2.9%) and Bloomsburg-Berwick, Pennsylvania (up 0.6%), the data vendors report said.
However, the slight increase in late borrower payments shouldn’t be a cause for alarm. Home equity growth has created a cushion for most homebuyers “[positioning them] to weather a shallow recession,” the report argues.
“More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments,” said Molly Boesel, principal economist at CoreLogic.
Equity increased by 15.8% year-over-year in the third quarter of 2022, for an average gain of $34,300 per borrower, per the data vendor.
