The effect of natural disasters—hurricanes and wildfires—in 2017 appears to have a lessening impact on mortgage delinquencies at least on the national levels. Nearly 5 percent of mortgages were in some stage of delinquency (30 days or more past due) in January, a slight decline from a year ago, according to CoreLogic’s Loan Performance Insights Report, released Tuesday.
But the areas hit by natural disasters late last year continue to face elevated levels of mortgage delinquencies and foreclosures.
“The areas hit by last year’s hurricanes and wildfires are experiencing the ‘pig in a python’ effect on their local delinquency rates,” says Frank Nothaft, CoreLogic’s chief economist. “Early-stage delinquencies have largely dropped back to normal, while serious delinquency remains elevated.”
In hard-hit markets, like the Houston and Naples metro areas, the serious delinquency rate (those that are 90 days or more past due and including loans in foreclosure) is triple its level prior to the hurricanes, Nothaft says. In the San Juan area of Puerto Rico, serious delinquency rates have quadrupled.
The rest of the nation, however, is seeing an improvement to its delinquency and foreclosure rates. The serious delinquency rate nationwide was 2.1 percent in January, the lowest for the month of January since 2007.
“Except for the metropolitan areas affected by natural disasters, most of the country has seen delinquency and foreclosure rates move lower over the past year,” says Frank Martell, president and CEO of CoreLogic. “Declines in the unemployment rate have supported a rise in income, and home-price growth has built home equity. These two economic forces coupled with high-quality underwriting have lowered overall delinquency rates.”
The states with the highest 30 days or more delinquency rates in January were: Mississippi (8.8%); Florida (8.4%); Louisiana (8.1%); New York (6.7%); Alabama (6.5%); and New Jersey (6.4%).
Source: CoreLogic
