The Mortgage Bankers Association recently reported that the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased over the fourth quarter of 2013 by 2 basis points to a seasonally adjusted rate of 6.39%. This is the lowest recorded share since the first quarter of 2008.
The decline in the delinquency rate reflected a decrease in the share of mortgages 60-90 days past due and the share of mortgages 90 or more days past due, but mortgages 90 or more days past due fell more. In the fourth quarter of 2013, the share of mortgages 60-90 days past due fell by 1 basis point to 1.06% and the share that was 90 or more days past due fell by 11 basis points 2.45%. Meanwhile, mortgages that were between 30 and 60 days past due rose by 10 basis points over the quarter to 2.89%. An earlier post illustrated that an increase in the share of mortgages 30-60 days past due does not mean that a spike in seriously delinquent mortgages is imminent. According to the post, the majority of mortgages 30-60 days past due either become current or remain in that position.
The delinquency rate does not include loans in the process of foreclosure. The share of loans in the foreclosure process at the end of the fourth quarter of 2013, the foreclosure inventory, declined by 22 basis points to 2.86%. This was the lowest foreclosure inventory rate seen since 2008. However, as the Figure below illustrates, while the foreclosure inventory is 1.78 basis points below its peak level, it remains 1.85 basis points above its average during the 1990s.