Mortgage delinquencies posted significant declines at the end of 2012, signaling that distress in the housing market is diminishing just as prices rebound and demand surges.
The national delinquency rate for mortgage loans on one- to four-unit properties fell to 7.09%, according to the Mortgage Bankers Assn. That was the lowest level since 2008. It was also a decline from 7.40% the prior quarter and 7.58% during the same period a year prior.
“We are seeing large improvements in mortgage performance nationally and in almost every state,” said Jay Brinkmann, chief economist for the mortgage bankers group. “With fewer new delinquencies, the foreclosure start rate and foreclosure inventory rates continue to fall and are at their lowest levels since 2007 and 2008 respectively.”
The number of loans that were seriously delinquent — those gone more than three months without a payment or in the process of foreclosures — dropped to 6.78%, down from 7.03% the prior quarter and 7.73% during the same period a year prior.
The only note of caution flagged by the association: The number of loans that were more than 90 days delinquent increased to 3.04%, up from 2.96% the prior quarter but down 3.35% during the same period a year prior.
The declines in delinquencies come as home prices rise. One measure of national home prices rose last month with a vigor not seen since the bubble days as the number of foreclosed homes and other distressed properties on the market shrank.
The median sales price for previously owned U.S. homes rose 12.3% annually in January to $173,600, the National Assn. of Realtors said Thursday. It was the 11th consecutive month of annual increases and the strongest such gain since November 2005.
In the West, the median price rose 26.6% over the year to hit $239,800 as sales fell.