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Mortgage Delinquences Increase in December but are Down over 25 percent from a year ago

Dennis Norman, St Louis REALTOR - mortgage delinquency ratesMortgage delinquencies in December increased to 2.24 percent of all mortgages, a slight increase from the month before when delinquencies were at 2.22 percent but a decrease of over 25 percent from a year ago when the rate was 3.01 percent. The mortgage delinquency rate is something I pay close attention to because it is the “leading indicator” of foreclosures and foreclosures and REO’s are one of the major hurdles to a recovery in the housing market. Declining delinquency rates are our first clue that the housing market is headed to a recovery.

We’re not out of the woods yet…
“Led by the mortgage markets, the second half of 2011 saw a slight reversal of the two-year downward trend in consumer credit default rates,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. “First mortgage default rates rose for the fourth consecutive month, as did the composite. Since August, first mortgage default rates have risen from 1.92% to the 2.19%. The composite also rose those months, from 2.04% to 2.24%.  The recent weakness seen in home prices is reflected in these data.

S&P/Experian Consumer Credit Default Indices
National Indices
 Index December 2011 Index Level November 2011 Index Level December 2010 Index Level
 Composite 2.24 2.22 3.01
 First Mortgage 2.19 2.17 2.93
 Second Mortgage 1.33 1.26 1.74
 Bank Card 4.60 4.91 6.73
 Auto Loans 1.27 1.17 1.69
                  Source: S&P/Experian Consumer Credit Default Indices
                             Data through December 2011

The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:

Metropolitan Statistical Area December 2011 Index Level November 2011 Index Level December 2010 Index Level
New York 2.13 2.21 3.01
Chicago 2.84 2.84 3.14
Dallas 1.56 1.38 2.21
Los Angeles 2.54 2.53 3.07
Miami 4.73 4.47 10.15
  Source: S&P/Experian Consumer Credit Default Indices
                 Data through December 2011

 

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