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U.S. Mortgage loan delinquency, which is the ratio of borrowers 60 or more days past due, increased for the 11th straight quarter, hitting an all-time national average high of 6.25% for the third quarter, up from 3.96% during the same period a year ago.
Although the rate increased from the previous quarter's 5.81%, the third quarter marks the third consecutive period the delinquency rate increase has decelerated, according to a report by TransUnion, a Chicago-based credit and information management company. The delinquency rate from Q408 to Q109 saw an increase of almost 14%, and the percent-change from Q1 to Q209 increased by 11.3%.
"While it continues to be a positive sign that the increase in mortgage borrower delinquency rates has slowed for three consecutive quarters, we have to keep things in perspective," FJ Guarrera, vice president of TransUnion's financial services division, said of the report's findings.
"Delinquency rates are rising and expected to peak at record levels. Until the housing market can consistently demonstrate several months of home value appreciation and the unemployment rate improves, mortgage delinquency will likely continue to rise," Guarrera said. "Many of these delinquencies in places like Nevada, California and Florida will result in foreclosures, potentially keeping home values depressed in these areas."
Mortgage borrower delinquency rates in the third quarter continued to be highest in Nevada (14.5%) and Florida (13.3%), while the lowest mortgage delinquency rates were found in North Dakota (1.7%), South Dakota (2.3%) and Vermont (2.6%). Areas showing the greatest percentage growth in delinquency from the previous quarter were Wyoming (17.9% increase), Kansas (17.4% increase) and North Dakota (16% increase). Bright spots for the quarter included the District of Columbia, showing a decline in mortgage delinquency rates, down 0.19% from the previous quarter.
The average national mortgage debt per borrower dropped 0.36% to $193,121 from the previous quarter's $193,811. On a year-over-year basis, the third quarter average represents a 0.43% increase over the Q308 average mortgage debt per borrower level of $192,287.
The area with the highest average mortgage debt per borrower was the District of Columbia at $359,788, followed by California at $354,510 and Hawaii at $312,844. The lowest average mortgage debt per borrower was in West Virginia at $97,265. Quarter over quarter, South Dakota showed the greatest percentage increase in mortgage debt (2.2% increase), followed by Montana (1.96% increase) and Wyoming (1.7% increase). Areas showing the largest percentage drop in average mortgage debt were Nevada (2.6% decrease), Vermont (1.97% decrease) and California (1.4% decrease).
"TransUnion is confident that its 2009 mortgage delinquency forecasts will continue on track falling just short of 7% by year end," Guarrera said. "Until the stabilization of housing prices makes solid traction across the U.S., TransUnion does not see national delinquency rates beginning to fall until the first half of 2010," Guarrera said.
With regard to regional forecasts, Nevada is anticipated to experience the highest mortgage delinquency rate by the end of this year, reaching as high as 16%. North Dakota is expected to continue to exhibit the lowest mortgage delinquency rate by year-end at around 1.7%.
Information for this analysis is culled quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10% of credit-active U.S. consumers.
