Mortgage Delinquency Rate Forecasted To Drop To Pre-Bubble Rates Next Year

By Dennis Norman, on December 10th, 2014

The Mortgage Delinquency Rate, the pre-cursor to, and leading indicator of, foreclosures, which play havoc with home prices, is expected to decline to 3.12 percent by the end of this month and continue to decline next year hitting 2.51 percent by the end of 2015,  according to a forecast just released by TransUnion.  If mortgage delinquency rates fall as lowest as forecast, it will hit the lowest level since the housing bubble burst.  A home mortgage that is 60 days or more delinquent is counted in the mortgage delinquency rate for this report by TransUnion.

The report goes on to state that, even though the forecast is good and the rate will be low relative to what we have seen the past 6 years or so, even if the mortgage delinquency rate hits 2.51% as projected, it will still be significantly higher than the historical norm of 1.5% – 2.0%.

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In support of the optimistic outlook on mortgage delinquencies, Steve Chaouki, head of financial services for TransUnion, said “we anticipate interest rates to remain relatively low next year and unemployment rates to continue their decline, both of which should help fuel home sales and improve consumers’ ability to pay. Foreclosures are also expected to continue to funnel through the legal system in 2015, which will reduce delinquencies that have been lingering for some time. All of these factors will contribute to a further decline in mortgage delinquencies.”

 

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