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Mortgage loan delinquency, the ratio of borrowers 60 or more days past due, increased for the ninth straight quarter, hitting a national average high of 5.22% for the first quarter, according to a report released today by TransUnion.com.
Traditionally seen as a precursor to foreclosures, this statistic is up nearly 14% from the 4.58% average in the fourth quarter of 2008. Year-over-year, mortgage loan delinquency is up approximately 62% from 3.23%. Information for this analysis is culled quarterly from approximately 27 million anonymous, randomly sampled, individual credit files.
Mortgage borrower delinquency rates in the first quarter were highest in Nevada (11.61%) and Florida (11.01%), while the lowest mortgage delinquency rates were found in North Dakota (1.51%), South Dakota (1.94%) and Alaska (2.14%). The three areas showing the greatest percentage growth in delinquency from the previous quarter were Hawaii, Oregon and Nevada, increasing 34.4%, 30.7% and 28.9%, respectively. However, there were some bright spots: Nebraska and South Dakota both showed a decline in mortgage delinquency rates, down 4.7% and 1.5% from the previous quarter.
The average national mortgage debt per borrower rose 1.41% to $195,500 from the previous quarter's $192,789. On a year-over-year basis, the first quarter 2009 average represents a 1.87% increase compared to the first quarter 2008 average of $191,917.
The area with the highest average mortgage debt per borrower was still California at $365,192, followed by the District of Columbia at $360,217 and Hawaii at $314,269. The lowest average mortgage debt per borrower was in West Virginia at $97,187. Quarter to quarter, Rhode Island showed the greatest percent increase in mortgage debt (5% increase), followed by Ohio (4.9% increase) and Idaho (4.5% increase). Areas showing the largest percentage drop in average mortgage debt were the Illinois (2.5% decrease), Alaska (2.1% decrease) and Iowa (0.78% decrease).
"At the end of the 2001 Recession, the national 60-day or worse mortgage delinquency rate increased to a high of just over 1.4% and then dipped before beginning a longer-term, gradual upward trend," Keith Carson, a senior consultant in TransUnion's financial services group, said in a news release.
"As the recession came to a close in November of that year, metropolitan areas in the South were found to have some of the highest mortgage delinquency rates. In the current recession, metropolitan areas in Florida and California are leading the pack in terms of mortgage delinquency: Miami (16.39%), Fort Myers, Fla. (15.28%), Merced, Calif. (15.24%), Stockton, Calif. (13.92%) and Naples, Fla. (13.01%). Today, the least risky metropolitan area is Bismarck, N.D. - a position fairly consistent with what it held during the previous recession," Carson said.
"The troubling news is that the mortgage delinquency rate continues to climb upward at an average quarterly pace almost doubling that experienced in the last recession," according to Carson. "For example, during the 2001 recession, which began in March and ended in November of the same year, the average quarter-to-quarter national mortgage delinquency growth rate was nearly 6.5% compared to the nearly 12% quarter-to-quarter delinquency growth we are experiencing today."
However, this quarter's results offer a glimmer of hope and a chance for optimism, according to Carson. For the first time since the recession began at the end of 2007, the quarterly growth rate for national mortgage delinquency decreased. On a state basis, for example, Florida's quarterly growth rate for mortgage delinquency went down from 22% in the fourth quarter of 2008 to almost 16% in the first quarter of this year, he said.
"Credit performance generally lags economic conditions. Although there have been some pockets of promising news on the economic front, we see unemployment and deflated housing prices continuing to pushing up delinquency rates through the remainder of this year," Carson said. "At this juncture it is difficult to predict with any certainty what impact, if any, the various government initiatives will have on the mortgage delinquency."
