The national rate of 60+ day mortgage loan delinquencies will drop nearly 20% by the end of 2011 to 4.98% from an expected 6.21% at the conclusion of this year, TransUnion forecasts in a new report.
The projected decrease would more than double the 9.87% yearly decline that is expected between the end of 2009 and the end of 2010 (from 6.89% to 6.21%). This compares to the year-over-year increases of 54% between 2006 and 2007, 53% between 2007 and 2008 and 50% between 2008 and 2009.
TransUnion is projecting double-digit declines in mortgage delinquencies for every state and the District of Columbia through 2011. The states projected to experience the greatest decreases in mortgage delinquencies – Nevada (-24.77%), Arizona (-24.27%) and Florida (-23.9%) – are the same areas expected to have the highest 60-day mortgage delinquency rates at the end of next year (11.06% for Florida, 10.87% for Nevada and 7.59% for Arizona).
North Dakota, South Dakota and Nebraska should continue to rank among the states with the lowest delinquency rates at the end of next year.
The improvement in delinquencies will be driven by a gradual improvement in unemployment and continued stabilization in housing prices, says Steve Chaouki, group vice president in TransUnion's financial services business unit.
‘While there is continued price pressure in many markets, we expect a growing number of areas of the country to experience a rise in property values, along with some stabilization of values in those states and markets hardest hit by the recession,’ he says.
TransUnion recently reported that the national 60+ day delinquency rate dropped 3.45% in the third quarter to 6.44%, marking the largest quarterly decline since the fourth quarter of 2006.