Delinquencies Hit Record Low In December 2021

U.S. delinquencies hit their lowest level ever recorded by CoreLogic in December 2021, the result of improving employment and soaring equity, the company’s Loan Performance Insights Report revealed.

Only 3.4% of all mortgages were in some stage of delinquency (30 days or more past due), down 2.4% annually. This is the lowest recorded delinquency rate since at least January 1999.

Delinquencies declined in every state, with the largest drops in Nevada, Hawaii, Florida, New Jersey, and New York.

Early-stage delinquencies (30-59 days past due) accounted for 1.2% of mortgages, down from 1.4% YOY, while adverse delinquencies (60-89 days) fell from 0.5% to 0.3%.

Serious delinquencies (90 or more days), which peaked at 4.3% in August 2020, saw a serious drop from 3.9% to 1.9% YOY.

The foreclosure inventory rate– the share of mortgages in some stage of the foreclosure process– fell to 0.2%, its lowest recorded rate since January 1999.

CoreLogic notes that the unemployment rate dropped for the sixth consecutive month in December to its lowest since the beginning of the pandemic, while homeowners gained huge amounts of equity as prices jumped by 18.5% YOY.

“Nonfarm employment grew by 6.7 million workers during 2021, the largest one-year increase, supporting income growth and keeping more families current on their loans,” said Dr. Frank Nothaft, chief economist at CoreLogic.

“Nonetheless, places hit hard by natural disasters have experienced a spike in missed payments. Serious delinquency rates for December in the Houma-Thibodaux metro area were nearly two percentage points higher than immediately before Hurricane Ida.”

Even so, Houma’s overall December delinquency rate improved from October and November.

Homebuyers are increasingly concerned about climate-related risk when deciding where to buy a home. A survey found that more than 3 in 4 recent buyers took natural disasters into account when choosing the locations of their homes.

Current homeowners in high-risk areas are beginning to face climate-related economic challenges. In Louisiana, changes to National Flood Insurance Program are expected to produce phased-in increases of more than 129% for around half of policyholders.

Kim Callaway, director of legal and governmental affairs for the Louisiana Realtors Association, told The Advocate there is real fear that insurance premiums might lead to unsellable homes and foreclosures.

“It’s not Florida, it’s not California, it’s not the East Coast. People living on the coast, it’s not vacation homes,” Callaway said. “It’s people who work at plants, it’s people who work for railroads. It’s fishermen, it’s shrimpers.”