Mortgage delinquencies and foreclosure starts increased in June but ultimately stayed below pre-pandemic levels, according to Black Knight’s First Look at June 2022 data.
The national delinquency rate rose by nine basis points month-over-month to 2.84%. But the three months prior saw consecutive record lows in delinquencies, meaning the boost has little bite.
The increases were distributed across all categories. The number of borrowers late by a single day jumped 5%. Those late by 90 or more days increase by a mere 1%, and that comes on the heels of a 21-month streak of improvement.
Foreclosure starts rose by 27% but remained down 40% from pre-pandemic levels. However, it does constitute a 441% YOY increase, which Black Knight notes is a “significant rise from pandemic-driven lows.”
Starts accounted for 4% of serious delinquencies, the highest share since March 2020 but less than half the pre-pandemic rate.
Prepayment declined 7%, and prepays are now down by 64% YOY as rates force purchase and refi lending down.
Foreclosure inventory increased by 16,000 month-over-month as volumes increased from the record lows brought about by moratoriums and forbearance protections.
Some analysts and experts worried that the end of moratoriums would lead to a wave of foreclosures, but so far that hasn’t happened. Though year-over-year increases may make shocking headlines, the historically low levels of last year mean that even sky-high increases result in relatively low numbers of foreclosures.
“Moratoria and forbearance that helped keep homeowners out of foreclosure are expiring for many borrowers, but ongoing strong employment numbers and large amounts of equity should keep foreclosure rates low moving forward,” Molly Boesel, principal economist at CoreLogic, said.