Smart Borrower Blog

Mortgage Delinquency Rate Falls to 18-Year Low

Feb 27th, 2019 @ 3:02 PM by Amber Nelson

U.S. mortgage borrowers kept up with their payments so well in the 2018 fourth quarter that the national mortgage delinquency rate fell to an 18-year low, according to the Mortgage Bankers Association.

The seasonally adjusted delinquency rate on mortgages for one-to-four unit residential properties decreased to 4.06% of all home loans, down from 4.47% in the third quarter of 2018 and down from 5.17% a year earlier.

“The overall national mortgage delinquency rate in the fourth quarter was at its lowest level since the first quarter of 2000,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “What’s even more noteworthy, the delinquency rate dropped from the previous quarter and on a year-over-year basis across all loan types and stages of delinquency.”

Delinquencies that were behind by 30 days or more declined to 2.29%, down from 2.51% in the third quarter, while 60-day delinquency rates fell to 0.74% and 90-day delinquencies dropped to 1.03%.

In terms of loan types, conventional loan delinquencies posted a decline of 37 basis points to 3.19%, FHA loan delinquencies dropped 31 basis points to 8.655 and VA loan delinquencies fell 45 basis points to 3.71%.

The improvement in timely loan payments was attributed to economic gains. “With the unemployment rate near a 50-year low, wage growth trending higher and household debt levels relative to disposable incomes at a 35-year low, homeowners are in great shape, and mortgage performance is quite strong,” added Walsh.

Foreclosure actions, however, did increase slightly in the 2018 fourth quarter. Foreclosure starts rose to 0.25% from 0.23% in the third quarter, but of all mortgage loans, 0.95% were in some part of the foreclosure process, down from 0.99% the quarter before and 1.19% the previous year. That brought the foreclosure inventory rate to its lowest level in over 22 years.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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