Central Valley markets stronger than national average

Serious mortgage delinquency rate holds steady

IRVINE
October 10, 2017

•  Nationally, near 10-year low

Nationally, 4.6 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in July, a 0.9 percentage point year-over-year decline in the overall delinquency rate compared with July 2016 when it was 5.5 percent, according to a new report released Tuesday by real estate financial information company CoreLogic Inc. (NYSE: CLGX) of Irvine.

As of July, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.7 percent, down from 0.9 percent in July 2016 and the lowest since the rate was also 0.7 percent in July 2007.

Here is how Central Valley markets look, according to CoreLogic:

• In Stockton-Lodi, 3.6 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 4.4 percent in July 2016, representing a decrease of 0.8 percentage points. Stockton-Lodi mortgages in serious delinquency (90+ days past due) totaled 1.2 percent in July compared with 1.5 percent in July 2016. The foreclosure inventory rate for this July was 0.3 percent compared with 0.4 percent a year earlier.

• In Visalia-Porterville, 4.9 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 5.3 percent in July 2016, representing a decrease of 0.4 percentage points. Visalia-Porterville mortgages in serious delinquency (90+ days past due) totaled 1.5 percent in July compared with 1.8 percent in July 2016. The foreclosure inventory rate for this July was 0.3 percent compared with 0.5 percent a year earlier.

• In Bakersfield, 5.1 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 5.6 percent in July 2016, representing a decrease of 0.5 percentage points. Bakersfield mortgages in serious delinquency (90+ days past due) totaled 1.7 percent in July compared with 2.1 percent in July 2016. The foreclosure inventory rate for this July was 0.5 percent compared with 0.6 percent a year earlier.

• In metropolitan Sacramento, 2.6 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 3.1 percent in July 2016, representing a decrease of 0.5 percentage points. Sacramento-Roseville-Arden-Arcade mortgages in serious delinquency (90+ days past due) totaled 0.9 percent in July compared with 1.2 percent in July 2016. The foreclosure inventory rate for this July was 0.2 percent compared with 0.3 percent a year earlier.

• In Modesto, 3.6 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 4.2 percent in July 2016, representing a decrease of 0.6 percentage points. Modesto mortgages in serious delinquency (90+ days past due) totaled 1.1 percent in July compared with 1.5 percent in July 2016. The foreclosure inventory rate for this July was 0.3 percent compared with 0.4 percent a year earlier.

• In Merced, 3.6 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 4.3 percent in July 2016, representing a decrease of 0.7 percentage points. Merced mortgages in serious delinquency (90+ days past due) totaled 1.0 percent in July compared with 1.5 percent in July 2016. The foreclosure inventory rate for this July was 0.3 percent compared with 0.4 percent a year earlier.

• In Madera, 4.6 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 4.9 percent in July 2016, representing a decrease of 0.3 percentage points. Madera mortgages in serious delinquency (90+ days past due) totaled 1.6 percent in July compared with 1.9 percent in July 2016. The foreclosure inventory rate for this July was 0.5 percent compared with 0.5 percent a year earlier.

• In Fresno, 4.3 percent of mortgages were delinquent by at least 30 days (including those in foreclosure) in July compared with 4.8 percent in July 2016, representing a decrease of 0.5 percentage points. Fresno mortgages in serious delinquency (90+ days past due) totaled 1.3 percent in July compared with 1.7 percent in July 2016. The foreclosure inventory rate for this July was 0.3 percent compared with 0.5 percent a year earlier.

Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market, CoreLogic says. To monitor mortgage performance comprehensively, CoreLogic says it examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

The national rate for early-stage delinquencies, defined as 30-59 days past due, was 2 percent in July, down slightly from 2.3 percent in July 2016. The share of mortgages that were 60-89 days past due in July was 0.7 percent, unchanged from July 2016. The serious delinquency rate (90 days or more past due) declined from 2.5 percent in July 2016 to 1.9 percent in July and remains near the 10-year low of 1.7 percent reached in July 2007. Alaska was the only state to experience a year-over-year increase in its serious delinquency rate.

“While the U.S. foreclosure rate remains at a 10-year low as of July, the rate across the 100 largest metro areas varies from 0.1 percent in Denver to 2.2 percent in New York,” says Frank Nothaft, chief economist for CoreLogic. “Likewise, the national serious delinquency rate remains at 1.9 percent, unchanged from June, and when analyzed across the 100 largest metros, rates vary from 0.6 percent in Denver to 4.1 percent in New York.”

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30-days past due was 0.9 percent in July, down from 1.1 percent in July 2016, it says. By comparison, in January 2007 just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent and it peaked in November 2008 at 2 percent.

“Even though delinquency rates are lower in most markets compared with a year ago, there are some worrying trends,” says Frank Martell, president and CEO of CoreLogic. “For example, markets affected by the decline in oil production or anemic job creation have seen an increase in defaults. We see this in markets such as Anchorage, Baton Rouge and Lafayette, Louisiana where the serious delinquency rate rose over the last year.”

http://www.centralvalleybusinesstimes.com/stories/001/?ID=33430