TransUnion, a big three national
consumer credit reporting agency, says that mortgage delinquencies of 60 days or
more duration declined in the third quarter to 5.41 percent from 5.49 percent
in the second quarter. This was the
third consecutive month that the rate declined and it is now 8 percent lower
than in the third quarter of 2011 when it was 5.88 percent.
Rates in 22 states improved from the
second quarter and 42 states saw an annual decrease. However, only 49 percent of metropolitan
areas improved during the quarter; in each of the first two quarters of 2012
more than 70 percent of metropolitan areas showed improvement.
"Continued declines in mortgage
delinquency rates are a welcome sign and reflect that relatively more
homeowners are able and willing to make their mortgage payments each
month," said Tim Martin, group vice president of U.S. Housing in
TransUnion's financial services business unit. "However, we still
have a long way to go to reach more 'normal' conditions of a delinquency rate
in the 1-2% range for the U.S. average."
The greatest annual improvement in
the delinquency rate occurred in two of the states most impacted by
foreclosures, Arizona and California.
Since the third quarter of 2011 Arizona's rate has dropped nearly 25
percent to 5.62 percent and California's rates is down 24 percent to 5.56
percent. The largest increase was in the
District of Columbia where the rate jumped 11 percent to 6.10 from 5.57 percent
one year earlier. Eight states also
experienced annual increases with New Jersey registering the largest, nearly 10
percent to 8.33 percent. The highest
rates in the country are in Florida at 13.09 percent and Nevada at 10.93
percent but both of these states did show an annual improvement.
TransUnion expects the mortgage
delinquency rate to fall again in the 4th quarter, but only
slightly. "It's generally tough to expect improvement in delinquency
rates in the fourth quarter of the year given the extra demands on household
income that many experience during the holiday season," said Martin. "However,
we saw some improvement in the housing market in the third quarter with regard
to house prices, home sales and increased refinance activity, and we believe we
will start to see these numbers reflected in improved mortgage delinquency next
quarter. As such, we forecast the year-end delinquency rate to improve to
something in the 5.25%-5.35% range."