Mortgage delinquencies hit new low, but challenges loom

By stages, early-stage delinquencies (30 to 59 days past due) dipped one basis point from the same period a year ago to 1.2% in January. Likewise, adverse delinquency (60 to 89 days past due) was down by two basis points to 0.3%, and serious delinquency (90 days or more past due, including loans in foreclosure) posted a two-percentage-point decline to 1.8%.

“The large rise in home prices — up 19% in January from one year earlier, according to CoreLogic indexes for the US — has built home equity and is an important factor in the continuing low level of foreclosures,” said Frank Nothaft, chief economist of CoreLogic.

Foreclosure inventory rate, or the share of mortgages in some stage of the foreclosure process, decreased to 0.2% from 0.3% in January 2021. Transition rate, or the percentage of mortgages that transitioned from current to 30 days past due, remained unchanged at 0.7%.

While the January foreclosure rate is down from last year’s level, the expiration of moratoriums in some states caused the number of foreclosures to rise month over month.