US mortgage delinquency rates hit new low thanks to two factors

The share of mortgages in some stage of the foreclosure process also decreased to a 23-year low of 0.2% in January. Transition rate was down by two basis points to 0.6%.

According to the report, rising home equity – fuelled by the 18.5% annual increase in national home prices – helped lower delinquency rates. The unemployment rate also declined for the sixth consecutive month in December to a pre-pandemic low of 4%.

“Nonfarm employment grew by 6.7 million workers during 2021, the largest one-year increase, supporting income growth and keeping more families current on their loans,” said CoreLogic chief economist Frank Nothaft. “Nonetheless, places hit hard by natural disasters have experienced a spike in missed payments. Serious delinquency rates for December in the Houma-Thibodaux metro area were nearly two percentage points higher than immediately before Hurricane Ida.”

All but one metro area reported a slight annual decrease in the overall delinquency rate. The one area where delinquencies were unchanged in December 2021 was Houma-Thibodaux, La., which was impacted by Hurricane Ida in the fall.