Mixed economic news shows rise in mortgage delinquencies, but big drop in foreclosures

by | May 24, 2023

  • The national mortgage delinquency rate rose in April, but serious delinquencies and foreclosure data showed improvement.
  • Florida experienced a significant reduction in delinquency rates despite a strained real estate market.
  • Foreclosure starts reach the lowest level since September 2022, signaling positive trends in the housing market.

According to a new report released by Jacksonville-based Black Knight, Inc., a mortgage data and analytics company, the national mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) rose by 13 percent in April. While this indicates a notable month-over-month increase, the figure also represents a 2.11 percent rise year-over-year.

However, the end of April falling on a Sunday impacted the processing of payments made on the last calendar day, which helped worsen the rise in early-stage delinquencies (borrowers 30 days late). This led to an increase by 200,000 (+25%), which aligns with the impacts of previous similar calendar-related events.

Despite this rise in early-stage delinquencies, the report showed significant improvement in serious delinquencies, defined as loans 90 or more days past due. In 45 states, accounting for 90% of the nation, plus the District of Columbia, the number of such loans saw a reduction.

Meanwhile there was good news on the foreclosure front. April saw a 23% decrease in foreclosure starts to 25,000 for the month – the lowest since September 2022. This figure stands 45 percent below the pre-pandemic level of April 2019. In addition, the percentage of foreclosure actions initiated on serious delinquencies in April remained more than four percentage points below the monthly average before the pandemic.

Florida’s situation reflects the broader national trend, but with some distinct features. The state, lagging behind most others, ranked 48th in terms of improvement over the last 12 months, according to a data published in April 2023. Despite this, the state saw a significant decline of more than 15% in delinquency rates from February, marking the second-largest reduction in the past 17 years. This brought the rate of delinquent mortgages down to just 3.83 percent of all mortgages in Florida.

The local real estate market, however, seems to be under strain from high rates and low inventory, affecting the spring homebuying season. Mortgage prepayment activity – a measure of overall economic health – fell to 0.44 percent, indicating a slowdown in the housing market.

At the same time, the report highlighted a surge in home prices in the eastern half of the United States last month, with Miami experiencing the highest monthly increase nationwide at 0.63%. This, along with affordability and limited housing inventory, is driving up prices.


%d bloggers like this: