Delinquencies Up For The Ninth Quarter In A Row
For the ninth quarter in a row, TransUnion.com is reporting that mortgage delinquencies continue to rise. Using data taken from 27 million anonymous, randomly sampled, individual credit reports, the company says 5.22 percent of all mortgage borrowers in the first quarter were at least 60 days late. A year ago the figure was 3.22 percent.
States with the highest delinquency numbers were Nevada (11.61 percent) and Florida (11.01 percent), while the lowest were in North Dakota (1.51 percent), South Dakota (1.94 percent) and Alaska (2.14 percent). The TransUnion chart below shows the delinquency track for Nevada (red), North Dakota (green) and the national average (blue).
More Mortgage Debt
Given lay-offs and a tough economy you might think that people would reduce spending, but mortgage debt per person actually rose from $191,917 last year to $195,500 in the first quarter of 2009.
Why is this stuff important? The country has a ton of foreclosures — more than 1 million foreclosure filings were made in March, April and May according to RealtyTrac.com. Delinquencies are simply a leading indicator, a suggestion of what might happen in the future. If you want fewer foreclosures then you first want fewer delinquencies.
“Our national predictions were only 1.6 percent off from the actual delinquency rate for first quarter 2009. We have adjusted our projections to reflect data from the most recent quarter, and adopted slightly different scenarios in consumer confidence and the general economy. These forecasts now show the 2009 mortgage delinquency rates reaching 7 percent by year end,” says Keith Carson, a senior consultant in TransUnion’s financial services group.
“Credit performance generally lags economic conditions,” he continue. “Thus although there have been some pockets of promising news on the economic front, we see unemployment and deflated housing prices continuing to pushing up delinquency rates through the remainder of this year. At this juncture it is difficult to predict with any certainty what impact, if any, the various government initiatives will have on the mortgage delinquency.”
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Comment by Boston Neighborhoods on 17 June 2009:
Really enjoyed your informative article in regards to the real estate topic. How is the luxury real estate market out there ?
Jim
Comment by Peter G. Miller on 17 June 2009:
Jim –
The most recent issue of Vanity Fair tells of massive price declines in the Hamptons among the rich and famous. Given the decline on Wall Street I suspect many of the rich are now less rich.