In its “first look” at the April 2021 month-end mortgage performance statistics, Black Knight, Inc. offered some good news on the rate of delinquencies as the economy recovers: if current trends continue, delinquencies should be back to pre-pandemic levels by the end of this year.
“After last month’s huge decline, April’s 7.11 percent drop in the national delinquency rate may not seem so big of a deal,” the company said in a release. “But it is. It brought the delinquency rate down under 5 percent for the first time since COVID turned the world upside down.
“As the economy gets back on track, we’re churning through a lot of the distressed inventory of mortgages,” it continued. “At the current rate of improvement, overall delinquencies should be back to pre-pandemic levels by the end of 2021.”
The national delinquency rate improved in April, decreasing to 4.66 percent from 5.02 percent in March. While the number of new delinquencies did increase 23 percent compared with March 2021, they are still down 33 percent year-over-year, and more than 14 percent of homeowners (about 400,000) became current on their payments.
Serious delinquencies also saw a decrease of about 151,000 month-over-month. However, there are still four times as many serious delinquencies now than before the pandemic, totaling nearly 1.8 million for first-lien mortgages.
“The vast majority of those serious delinquencies are in forbearance,” Black Knight stated. “As of right now, it looks as though the end of Q3/beginning of Q4 will be an inflection point in terms of our understanding of how the post-forbearance world will shake out. Until then, all improvement is welcome news.”
The first look also looked at foreclosure starts and active foreclosure inventory. These statistics saw record lows in April 2021, as moratoriums and borrower forbearance plan participation continue. In April, there were 3,700 foreclosures starts and 153,000 in active foreclosure.