Delinquent mortgages continue to fall across the United States, providing great news to a recovering housing market. Delinquent mortgages are mortgages with an outstanding bill for payments due. Delinquent mortgages are a great way to gauge the housing market’s health as well as the financial health of current homeowners. Having less delinquent mortgages implies that a stronger economy has formed or is forming—helping those with mortgages pay of current debts and giving buyers the sense (whether true or not), that they are taking less financial risk by taking out a mortgage.
According to a report by the Mortgage Banker’s Association, delinquency rates for mortgage loans on one to 4 unit properties fell by 5.3 percent. That level is 24 basis points below the 1st quarter of 2015 and 75 points below levels seen last year.
And its not just the overall average rate that has been dropping. No, every stage of delinquency fell over the past year-providing heartening news to the US Housing Market. All loans that were past due fell by 70 points. All loans 30 – 59 days past due fell by 17 points. All loans from 60 to 89 days past due fell by 8 points and all loans 90 days or more overdue fell by 45 points.
In 2009, delinquency rates hit a high of 5.1 percent. Currently, delinquency rates sit at 1.9 percent. There is still work to be done however, as prerecession levels sate comfortably at 0.84 percent.
Less delinquent mortgages means happier homeowners and less anxious home buyers. Its already a financial burden to purchase a home. Having the emotional burden of neighbors leaving and friends drowning in finances did little to convince homebuyers that the time was right to buy during the recession. Hopefully, as more potential buyers see the financial advantages to owning a home, more and more will take the plunge, helping to deepen the mortgage and therefore housing market even more.
Hart Real Estate Solutions