The Mortgage Banker Association’s (MBA) National Delinquency Survey showed the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased by the end of the fourth quarter of 2021.
“Mortgage delinquencies descended in the final three months of 2021, reaching levels at or below MBA’s survey averages dating back to 1979,” MBA Vice President of Industry Analysis Marina Walsh said. “The fourth-quarter delinquency rate of 4.65 percent was 67 basis points lower than MBA’s survey average of 5.32 percent. Furthermore, the seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.83 percent in the fourth quarter, close to the long-term average of 2.80 percent.”
Low unemployment, more labor force participation, higher wage growth, accumulated home equity, and the support of homeowners through post-forbearance loan workouts all contributed to the prevailing strength of the U.S. economy, Walsh said.
“The quarters right before the COVID-19 pandemic represented some of the lowest delinquencies ever recorded,” Walsh said. “Delinquencies are now approaching levels not seen since the first quarter of 2020, which is a testament to the strength of the U.S. labor market.”
Compared with the third quarter of 2021, the seasonally adjusted mortgage delinquency rate average generally decreased, MBA stated. The 30-day delinquency increased 14 basis points to 1.65 percent, the 60-day delinquency rates decreased 4 basis points to 0.56 percent, and the 90-day delinquency rate decreased 41 basis points to 2.44 percent.
Conventional loan delinquencies increased 3 basis points quarter-over-quarter to
3.58 percent, Federal Housing Administration (FHA) loan delinquencies decreased 58 basis points to 10.76 percent, and the Veterans Affairs (VA) loan delinquencies decreased by 57 basis points to 5.24 percent.
On a year-over-year basis, mortgage delinquencies saw a decrease of 151 basis points for conventional loans, a decrease of 389 basis points for FHA loans, and a decrease of 205 basis points for VA loans.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure, the MBA stated. The percentage of loans in the foreclosure process was 0.42 percent at the end of the fourth quarter of 2021, down 4 basis points from the third quarter and 14 basis points lower than one year ago. This is the lowest foreclosure inventory rate since the third quarter of 1981. The percentage of loans on which foreclosure actions were started in the fourth quarter was 0.03 percent.
The four states with the largest decreases in their overall delinquency rate from last quarter were Louisiana (119 basis points), Nevada (88 basis points), Alaska (72 basis points), and Texas (66 basis points).