Delinquencies inch up as borrowers struggle with payments

Delinquencies slightly bounced up in the month of July, but were 1.2% lower on a year-over-year basis, a monthly report published by CoreLogic found.

Three percent of all mortgages were 30 or more days past due or in foreclosure in July. This was down from 4.2% in July 2021, but an increase from 2.9% a month ago.

The percentage of loans between 30 and 59 days also slightly increased to 1.3% from 1.2% in June. The increase in early-stage delinquencies is a “clear increasing trend on a month-over-month and year-over-year basis,” the data vendor said. 

Inflation may be the culprit for the moderate uptick in delinquency rates, CoreLogic’s report said.

“While the share of mortgages that are 30 to 89 days past due remains below the pre-pandemic level, the slight increase is occurring in most areas of the country and could indicate that more borrowers are having trouble making their monthly payments,” said Molly Boesel, principal economist at CoreLogic.

Loans which were 90 days or more past due made up 1.3% of July’s delinquencies, remaining unchanged from the month prior. Last July,  2.8% of loans were in the seriously delinquent category.

Meanwhile, foreclosure inventory ended July at 0.3%, unchanged from June and May, but up from 0.2% year-over-year. The slightly elevated foreclosure rate may be a result of mortgage forbearance periods and moratoriums ending for some homeowners, the report stated.

On a state-by-state basis, all states posted annual declines in their overall delinquency rates. States with the largest delinquency declines were Hawaii, Nevada, New Jersey and New York.

All metro areas also posted decreases in serious delinquency rates, with Odessa, Texas, Laredo, Texas, and Kahului-Wailuku-Lahaina, Hawaii posting the largest decreases, CoreLogic’s report said.