Clouds on the Horizon for Many U.S. Homeowners: Overall Delinquency Rates Beginning to Climb
CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report for May 2020. On a national level, 7.3% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure). This represents a 3.7-percentage point increase in the overall delinquency rate compared to 3.6% in May 2019.
To gain an accurate view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency, including the share that transition from current to 30 days past due. In May 2020, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:
In the months leading up to the pandemic, U.S. mortgage performance was showing signs of sustained improvement. The national unemployment rate matched a 50-year low in February, and overall delinquency had been on an impressive 27 consecutive-month decline. However, by May 2020 — just two months after the coronavirus (COVID-19) was declared a global pandemic — U.S. unemployment surged past 13%, leaving over 4 million homeowners (accounting for more than 8% of all mortgages) little choice but to enter a COVID-19 mortgage forbearance program.
“The national unemployment rate soared from a 50-year low in February 2020, to an 80-year high in April,” said Dr. Frank Nothaft, chief economist at CoreLogic. “With the sudden loss of income, many homeowners are struggling to stay on top of their mortgage loans, resulting in a jump in non-payment.”
Absent further government programs and support, CoreLogic forecasts the U.S. serious delinquency rate to quadruple by the end of 2021, pushing 3 million homeowners into serious delinquency...