Mortgage delinquency rates ticked up slightly in February, the first increase since August 2020. CoreLogic said the national delinquency rate at the end of the reporting period was 5.7 percent, up 0.1 percentage point from January. The rate indicates the percentage of all mortgages that were 30 or more days past due including those in foreclosure. The rate in February 2020, one month before the COVID-19 virus shut down much of the country, was 3.6 percent. It peaked at 4.3 percent in August 2020.
"Some families that had overspent during the year-end holiday season, and then faced financial stress in the new year, may slip behind on a mortgage payment by February," said Dr. Frank Nothaft, chief economist at CoreLogic. "During each of the last five years, the 30-day delinquency rate moved higher from January to February. With economic conditions improving, we expect delinquency rates to move lower in coming months."
The rate of early stage delinquencies, those 30 to 59 days past due, was 1.5 percent, down from 1.8 percent in February 2020. The share of loans that were 60 to 89 days past due was 0.5 percent, 0.1 point lower than a year earlier.
The impact of the pandemic is still apparent in the serious delinquency rate, loans 90 or more days past due including those in foreclosure. That rate was 3.7 percent in February, a 2.5 point annual increase.
Foreclosures have been reduced by the various pandemic-related moratoria. The foreclosure inventory rate, the share of loans in the process of foreclosure, was down 0.1 point from February 2020 at 0.3 percent.
"Overall delinquency ticked up slightly in February, but the serious delinquency and foreclosure rates continued a monthly decline," said Frank Martell, president and CEO of CoreLogic. "Consumer confidence continues to rise as the economy roars back to life. These factors bode well for housing fundamentals in 2021 and as far as the eye can see."
During the month of February 0.9 percent of mortgages that had been current in January transitioned to being 30 days past due. This is the same transition rate as in February 2020.
CoreLogic notes that government support throughout the pandemic, along with an improvement in the jobs picture, have enabled more borrowers to remain current on their mortgages than would otherwise have occurred.
All U.S. states and nearly all metro areas logged increases in annual overall delinquency rates in February. Hawaii and Nevada, both of which have highly tourist-dependent economies, had the largest annual increases at 4 percentage points each.