Long-term mortgage delinquency back to pre-financial crisis levels

Home mortgages that are in some stage of delinquency dropped from 5.2 percent a year ago to 5 percent in September, according to a new report from CoreLogic, an information intelligence company that serves the real estate and mortgage finance sectors.

The new data show a drop in delinquencies despite a spike in delinquencies of 30 to 59 days caused by hurricanes in Miami and Houston, metro areas that showed the highest level of mortgages that were at least 30 days overdue. New York, Chicago, and Las Vegas — one of the cities hit hardest by the financial collapse — round out the top 5. Other than the rise in 30 to 59 days overdue, delinquencies were down at every other stage.

The data also show the lowest percentage of total delinquencies of any September since 2006, or before the financial collapse. The rate of foreclosure inventory is also back to pre-crisis levels at 0.6 percent, down from 0.8 percent a year ago.

“While natural hazard risk was elevated in 2017, the economic fundamentals that drive mortgage credit performance are the best in two decades,” CoreLogic president and CEO Frank Martell noted in the report. “The combination of strong job growth, low unemployment rates, steady economic performance and prudent underwriting has led to continued improvement in mortgage performance heading into next year.”

The report is just the latest that suggests the housing market has fully rebounded from the collapse that rocked economies across the world a decade ago. For context on the current rate of delinquencies of 5 percent, the rate peaked at 11.9 percent in January of 2010 and remained above 11 percent for another year. It stayed above 10 percent for a year after that, and then decline by about a percent every year after.

The backlog of homes that were foreclosed during the housing collapse has all but returned to the hands of homeowners. Along with low delinquency rates, this has helped contribute to home prices matching or exceeding their pre-crisis peaks.

Whether that’s good for you depends on if you already own a home or are looking to buy one, and whether this is a good sign for the future remains to be seen.