Strong job and wage growth helped mortgage delinquencies continue to diminish in the first quarter of 2017, the Mortgage Bankers Association reported.
Mortgages that are late —but not in foreclosure — accounted for a seasonally adjusted 4.71% of all mortgages as of March 31, down nine basis points from the previous quarter and down six basis points from a year ago, according to the MBA's National Delinquency Survey released Tuesday.
Foreclosures were started on 0.3% of mortgages, up two basis points from the previous quarter, but down five basis points from a year ago. They contributed to the 1.39% of mortgages in foreclosure as of March 31, its lowest level since the first quarter of 2007. The foreclosure inventory fell 14 basis points from the fourth quarter and 35 basis points from a year ago.
Mortgages that were 90 days or more past due but not yet in foreclosure — an indicator of future foreclosures — stood at 1.39%, down 15 basis points from the fourth quarter and 18 basis points from a year ago.
The rate of homeowners 90-plus days late was highest in New Jersey (2.55%), Mississippi (2.48%), Louisiana (2.47%), New York (2.05%) and Alabama (1.88%). The rate was lowest in Alaska (0.67%), South Dakota (0.62%), Montana (0.58%), North Dakota (0.57%) and Colorado (0.54%).
Marina Walsh, MBA's vice president of industry analysis, said a drop in both the FHA and VA delinquency rates were the major ingredients to improvement in delinquencies during the first quarter.
“Employment growth started 2017 on strong footing, with the economy adding 216,000 jobs in January 2017 and 232,000 jobs in February. Average hourly wage growth increased 2.8% over the year, and has maintained a generally increasing trend since late 2015. These fundamentals have helped to support the performance of all loan types – whether FHA, VA or conventional loans,” she said.
Foreclosures fell in nearly all states in the first quarter, MBA said.
A separate report from ATTOM Data Solutions of Irvine, Calif., also showed foreclosure starts continuing to fall below pre-recession levels. A total of 34,085 U.S. properties started the foreclosure process in April, down 6% from March and down 22% from April 2016.
Altogether, foreclosure filings through default notices, scheduled auctions and bank repossessions were reported on 77,049 U.S. properties in April, down 7% from March and down 23% from April 2016 to the lowest level since November 2005.
The metro areas with the greatest increases in foreclosure rates included: Peoria, Ill. (1 in every 827 housing units, +160%); Prescott, Ariz. (1/887, +133%); Fargo, N.D.-Minn. (1/6,117, +78%); Atlantic City-Hammonton, N.J. (1/237, +69%) and Savannah, Ga. (1/974, +45%). The metro areas with the most improvement included: Lake Charles, La. (1/22,120, -95%); Santa Cruz-Watsonville, Calif. (1/26,259, -89%); Fort Wayne, Ind. (1/6,427, -85%); Chico, Calif. (1/9,713, -81%) and South Bend-Mishawaka, Ind.-Mich. (1/4,557, -70%).
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