Delinquencies on mortgage loans (30 days or more past due but not in foreclosure) on one-to-four-unit residential properties were at a rate of about 4.66% as of the end of the second quarter – a decrease of 11 basis points compared with the first quarter and a decrease of 64 basis points compared with the second quarter of 2015, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
It was the lowest quarterly delinquency rate since the second quarter of 2006.
The percentage of loans on which foreclosure actions were started during the second quarter was 0.32%, a decrease of three basis points from the previous quarter and down eight basis points from one year earlier.
It was the lowest foreclosure starts rate since the second quarter of 2000.
The percentage of loans in the foreclosure process – also known as the foreclosure inventory – at the end of the second quarter was 1.64%, a decrease of 10 basis points from the previous quarter and a decrease of 45 basis points compared with the second quarter of 2015.
It was the lowest foreclosure inventory rate since the second quarter of 2007.
The serious delinquency rate (90 days or more past due or in the process of foreclosure), was 3.11%, a decrease of 18 basis points compared with the first quarter and a decrease of 84 basis points compared with one year earlier.
It was the lowest serious delinquency rate since the third quarter of 2007.
“Mortgage performance improved again in the second quarter primarily because of the combination of lower unemployment, strong job growth, and a continued nationwide housing market recovery,” says Marina Walsh, Vice President of Industry Analysis for the MBA, in a statement. “The mortgage delinquency rate tracks closely with the nation’s improving unemployment rate. In the second quarter of 2016, the mortgage delinquency rate was 4.66 percent, while the unemployment rate was 4.87 percent. By comparison, at its peak in the first quarter of 2010, the delinquency rate was 10.06 percent and the unemployment rate stood at 9.83 percent.
“In addition, the delinquency rate of 4.66 percent for the second quarter of 2016 was lower than the historical average of 5.36 percent for the time period 1979 to the present,” Walsh adds. “Among the various loan types, the delinquency rate improved for conventional loans as well as Federal Housing Administration loans.”