Eye On Housing
The seasonally adjusted mortgage delinquency rate increased 16 basis points over the first quarter of 2013, increasing to 7.25%. Even with this quarterly increase, the current share of mortgage loans at some stage of delinquency still ranks as the second-lowest reading since 2008. In addition, the overall increase in delinquencies was driven by a sizable jump in the 30-day past due category and a slight uptick in mortgages 60 days past due. The 90+ day delinquency bucket edged lower to 2.88%, and is now at nearly a five-year low.
Foreclosure starts remained unchanged at 0.7% of all first-lien mortgages during the first quarter of 2013. A total of 15 states registered a quarter-to-quarter drop in new foreclosure activity, but the overall downward trend in foreclosure starts remains in place as 45 states saw a year-over-year decline. Also, the state-by-state variation for foreclosures started is at its smallest since mid-2007.
Florida remains at the heart of the nation’s ongoing foreclosure troubles, ending the first quarter with the highest foreclosure starts rate (1.13%) and accounting for 11.6% of all foreclosures started nationally. Georgia, Mississippi and Illinois all posted foreclosure start rates at or above 1% in the first three months of 2013, but combined these three states accounted for only a slightly larger share of the national total than Florida.
The foreclosure inventory continues to shrink across much of the nation. During the first quarter, 3.55% of all loans were at some stage of foreclosure, a 19 basis point drop from the last three months of 2012 and an 84 basis point decline compared to the same period a year ago. This metric now stands at its lowest point since the end of 2008.
Foreclosure inventories fell in 40 states versus last quarter and 45 states have seen their inventories shrink in the past year. Once again, Florida is at the epicenter, containing more than 23% of the nation’s total inventory of foreclosed loans and just 7.3% of all loans. Combined with the remaining top 5 (New York, New Jersey, Illinois and California), these states accounted for 51.6% of the nation’s total number of loans in foreclosure, yet represented just 32.1% of all serviced loans.
New York’s high national share of inventories is likely a product of the state’s slow judicial process in handling foreclosure cases and recent moratoriums on new foreclosure activity. New Jersey and Illinois continue to struggle with disproportionately large shares of foreclosure inventories relative to loans and also have high foreclosure starts rates. By comparison, California’s foreclosure situation has improved significantly and only ranks among the top 5 due to the fact that it is a state with a very large number of mortgages—it accounts for 13.1% of all mortgages, but only 6.4% of the loans in foreclosure. In addition, the state’s foreclosure starts rate has declined steadily since the third quarter of 2011 and has come in below the national average in each of the past four quarters.
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