Mortgage

Mortgage defaults are highest in states with service-oriented economies

Distressed mortgage rates improved for the fifth straight year in January, but unstable labor markets led to an uneven recovery across the country, according to CoreLogic.

The Loan Performance Insight report showed the overall crime rate fell to 5.6% from 5.8% in December, while it was above the pre-coronavirus rate of 3.5% a year earlier. The pandemic hit hardest in states that are more reliant on the service and hospitality sectors as unemployment has risen from generation lows, CoreLogic chief economist Frank Nothaft told NMN.

Louisiana had the highest crime rate in January at 9.2%, followed by 8.4% in Mississippi and 8% in New York. Hawaii, Nevada and Florida had the largest annual crime growth rates, up 4.2, 4.1 and 3.1 percentage points, respectively.

"The unemployment rate in the USA rose by 2.8 percentage points to 6.3% in January 2021 compared to 3.5% in January 2020," said Nothaft. "The unemployment rate in Hawaii rose 8.3 percentage points and the unemployment rate in Nevada rose 4.8 percentage points, far more than the national average."

Idaho continued to lead the country with the lowest rate of 2.9%, followed by Wisconsin and South Dakota, which came in second with 3.1%. Iowa saw the smallest year-over-year increase, up 0.6 percentage points, followed by 0.8 point growth in Wisconsin and 1 point in Michigan.

The 30- to 59-day arrears proportion fell to 1.3% after being 1.4% for three months in a row, and decreased from 1.7% year over year. The 60- to 89-day arrears rate was 0.5% m / m, down from 0.6% per year.

The early-stage transition rate of arrears was the lowest since March 2020 and is likely to continue to decline with further improvements in the labor market, Nothaft added.

Serious arrears – loans that were 90 days or more past due, including foreclosures – decreased from 3.9% in December to 3.8%, but more than tripled the year-ago rate of 1.2%. Mortgages that were due more than 120 days but not yet foreclosed fell from 3.2% month-on-month to 3.1%, while in January 2020 they were more than three times higher than 0.9%.

Supported by the extension of the moratoria to the end of June, the foreclosure rate remained unchanged for the tenth consecutive month at 0.3%, while it fell from 0.4% per year. Broken down, New York remained the highest foreclosure state at 1.1%, followed by Hawaii 0.8% and Maine 0.7% for the third month in a row.

The three states with the highest foreclosure rates are unchanged from the last two months, with rates of 1.1% in New York and 0.8% in Hawaii and Maine. A group of 15 states had rates of 0.1% or less.

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