According to reports by TransUnion, mortgage delinquency rates increased for the 11th straight quarter. That means mortgage delinquency rates have increased steadily since 2006. The quarter rates reached an all-time high of 6.25%. It’s a 7.57% increase from the previous quarter’s average of 5.81%. This pertains only to mortgages that are 60 days or more past due.
Though delinquency rates are still increasing, they are slowly decelerating. This deceleration indicates that though rates are still climbing, they are doing so at a lower percentage compared to the previous quarter. If you compare the delinquency rate in the last quarter of 2008 to the first quarter of 2009, you’ll notice an increase of almost 14%, while the second quarter increase was only 11%. Overall, since 2006, mortgage borrower delinquency is up approximately 58% from the yearly average of only 4%.
Does California Have the Highest Rate of Debt per Borrower?
Closing in on the District of Columbia at $359,788, the rate of debt per borrowers for California is $354,510. And third is Hawaii, trailing with a gap of more than $40,000, at a rate of $312,844 per borrower. These three states represent the highest mortgage rates across the nation, but other states, such as Nevada and Florida, also have high delinquency rates resulting in foreclosures.
And similar to the mortgage delinquency rate, the unemployment rate is still climbing, but the number of job losses per month has decelerated during the last three months. Until unemployment rates improve, delinquency rates and consumer spending will continue to be an issue. Results in the first quarter of 2010 should indicate whether the market is beginning to improve.
When Can We Expect the Mortgage Delinquency Rate to Stabilize?
Forecasts show that these significant fluctuations in the market will continue into 2010. Eventually these numbers should stabilize or show slight increases or decreases depending on the health of the housing market.
While some view the deceleration of mortgage borrower delinquencies as a positive sign, the rates are still rising and expected to peak at record levels. If the housing market cannot consistently demonstrate several months of home value appreciation and the unemployment rate does not improves, mortgage delinquency will likely continue to rise. Until then, delinquencies in California will result in foreclosures, potentially keeping home values depressed.
Are you worried about an impending foreclosure on your home? Contact me for Short Sale information before it’s too late.
Sincerely,
Mark Shandrow
Real Estate Broker
Shandrow Group
shandrowgroup.com
