Fewer homeowners are falling behind on their mortgage payments. Only 4.3 percent of mortgages in March were in some stage of delinquency (30 days or more past due, including those in foreclosure), according to the Loan Performance Insights Report, released Tuesday by CoreLogic. The March foreclosure inventory rate—which reflects the share of mortgages in some stage of the foreclosure process—was 0.6 percent, which is the lowest rate of that month in 11 years.
“Unemployment and lack of home equity are two factors that can lead to borrowers defaulting on their mortgages,” says Frank Nothaft, CoreLogic’s chief economist. “Unemployment is at the lowest level in 18 years, and for the first quarter, the CoreLogic Equity Report revealed record levels of home equity growth with equity per owner up to $16,300 on average for the year ending March 2018.”
But economists warn that delinquencies could rise in the coming months.
“As we enter the summer, the risk of hurricane and wildfire damage to homes increases as does the risk of damage-related loan default,” says Frank Martell, president and CEO of CoreLogic. “Last year’s hurricanes and wildfires continue to affect today’s default rates. Serious delinquency rates are more than double what they were before last autumn’s hurricanes in Houston, Texas, and Naples, Florida. The serious delinquency rates have also quadrupled in Puerto Rico.”