Sneak peek at national mortgage picture shows record improvement

by | Apr 21, 2023


  • Mortgage delinquency rates in the US dropped more than 15% in March, marking the second-largest decline in the past 17 years.
  • But Florida came in a disappointing 48th place in comparison to other states, with only a 4 percent decrease in delinquent mortgages over the last year.
  • By comparison, top performing states like Vermont and Connecticut saw improvement of more than 20 percent, while Alaska led the nation with a 28 percent improvement.
  • In related news, home prices in the eastern US rose significantly in March due to affordability, low interest rates, and a limited number of homes on the market.

While the nation marked record improvement in mortgage delinquencies at 2.92 percent, Florida lags behind most states, coming in a disappointing 48th place when comparing improvement over the last 12 months. Even so, delinquency rates dropped more than 15 percent from February, marking the second-largest decline in the past 17 years – though in Florida over the last year, the number of delinquent mortgages has declined by just 4 percent overall and currently stands at 3.83 percent of all mortgages.

While delinquency rates typically fall in March due to borrowers using tax refunds and other seasonal revenues to pay down past-due debt, this month’s drop shows a marked improvement, according to a “first look” mortgage report from Jacksonville-based Black Knight, Inc., a mortgage data and analytics company. Serious delinquencies, referring to loans that are over 90 days past due, fell by 51,000 to their lowest level since March 2020, with every state experiencing a decrease in volume.

Black Knight cautions that there are still areas of risk to watch for, such as 2022 loans with high loan-to-value percentages and high interest rates, but their analysis shows most loans still maintain solid equity cushions. Foreclosure starts and sales increased in the month, but remain well below pre-pandemic levels nationwide.

Borrowers in active foreclosure saw little change, with numbers up 31,000, or 12%, from before the pandemic. Prepayments also increased from February but remain low by historical standards.

Last month, home prices in the eastern half of the United States soared, with Miami experiencing the largest monthly increase in the nation at 0.63%. The trend suggests an annualized growth rate between 6.1% and 7.6% if it continues. The surge in prices is driven by a combination of affordability, low interest rates, and a limited number of homes on the market.

Seventy-eight percent of the 50 largest U.S. markets saw home prices increase in February, a significant contrast to November 2022, when prices fell in 48 of the 50 largest markets.

While home prices continue to fall in many western U.S. cities, the housing market faces ongoing inventory challenges. More than 90% of markets experienced growing inventory deficits in February, and new listings were 27% below pre-pandemic levels.

Despite falling homeowner equity levels, overall total equity for mortgage holders stands at $14.6 trillion, down 12% from its peak in 2022. Tappable equity, or the amount available for homeowners to borrow while maintaining a 20% equity stake in their property, has decreased by 15% to $9.3 trillion.

Experts suggest that without significant shifts in interest rates, home prices, or household income, the current market dynamic is likely to continue for some time.

1 Comment

  1. Deborah Coffey

    Very brave reporting, Brian. The governor doesn’t like it if Florida isn’t #1 or, if an unpleasant truth gets published.

    Reply

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