Mortgage Loan Delinquency Rate Decreased for 5th Consecutive Quarter; Mortgage Loan Demand down as well

The national mortgage delinquency rate for homeowners that are 60 or more days past due decreased in the first quarter of 2011 marking the fifth consecutive quarterly decline according to a report released today by TransUnion. The report shows mortgage delinquencies for the first quarter of 2011 were down 3.4 percent from the prior quarter and down 8.6 from a year ago.

This news is good, particularly given the fact that, in most parts of the country, home prices continue to fall. “Decreasing home prices can be risky because they exert upward pressure on mortgage delinquency rates. The fact that mortgage delinquency continues to decline despite this situation demonstrates that today’s borrowers are less risky,” said Tim Martin, group vice president of the U.S. Housing Market in TransUnion’s financial services business unit. “While many homeowners still face pressure to make ends meet, they have lived in their homes for a long time and have diligently been paying their mortgage each month. These are borrowers that have roots in their residential neighborhoods and may already have substantial equity invested.”

Source: TransUnion

The TransUnion report also includes a “90-day Real Estate Inquiry Index’ which tracks the demand for home loans. This Index continued it’s decline during the first quarter of 2011 dropping to the second lowest value since the index was benchmarked in 2000. This would indicate that, in spite of record low interest rates, depressed home prices and the threat of interest rates increasing slightly later in the year, buyers are still cautious and lacking confidence in the market.

Highlights from the report:

• Mortgage Delinquency rates:
  • The mortgage delinquency rate in Q1 2011 reflects a decrease of 3.4 percent from the fourth quarter of 2010 (6.41 percent). Year over year, mortgage borrower delinquency is down approximately 8.6 percent (from 6.77 percent in the first quarter 2010).
  • Mortgage borrower delinquency rates in the first quarter of 2011 were highest in Florida (14.37 percent) and Nevada (14.19 percent), while the lowest mortgage delinquency rates continued to be concentrated in the Midwest: North Dakota (1.54 percent), South Dakota (2.53 percent) and Nebraska (2.60 percent).
  • Six states showed increases in delinquency from the previous quarter, with South Dakota (+14.0 percent), Maine (+8.2 percent) and New Jersey (+2.0 percent) experiencing the largest percent increases.
  • On a more granular level, 68 percent of metropolitan statistical areas (MSA) in the U.S. experienced a decline in mortgage delinquency rates compared to only 44 percent last quarter.
• Mortgage Debt per Borrower:
  • The average national mortgage debt per borrower increased (0.6 percent) to $190,115 from the previous quarter’s $189,046. On a year-over-year basis, the first quarter 2011 average represents a 1.4 percent decrease over the first quarter 2010 level of $192,774.
  • The area with the highest average mortgage debt per borrower continued to be the District of Columbia at $375,579 followed by California at $338,792 and Hawaii at $313,770. The lowest remained in West Virginia at $99,640.
  • Quarter over quarter, South Dakota showed the greatest percentage increase in mortgage debt per borrower (+3.3 percent), followed by North Dakota (+2.9 percent) and Connecticut (+2.5 percent). Areas showing the largest percentage decline were Alabama (-0.6 percent), New York (-0.4 percent) and Montana (-0.4 percent).

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