With the US unemployment rate still hovering at historically high levels, many homeowners struggled to make their monthly mortgage payments in May.
Mortgage delinquency rates continued to climb nationwide, according to CoreLogic's Loan Performance Insights Report. By May, 7.3% of mortgages were in some stage of delinquency (at least 30 days past due, including homes in foreclosure). The May delinquency rate represented a 3.7% uptick compared to the 3.6% a year ago.
"The national unemployment rate soared from a 50-year low in February 2020 to an 80-year high in April," said Frank Nothaft, chief economist at CoreLogic. "With the sudden loss of income, many homeowners are struggling to stay on top of their mortgage loans, resulting in a jump in non-payment."
The early-stage delinquency rate (30 to 59 days past due) was 3%, up from 1.7% in May 2019. The share of adverse delinquencies (mortgages 60 to 89 days past due) was 2.8%, up from 0.6% the same period last year. The share of mortgages 90 days or more past due, including those in foreclosure, rose from 1.3% in May 2019 to 1.5% in May 2020. This marked the first year-over-year increase in the serious delinquency rate since November 2010, according to the report.
However, the foreclosure inventory rate was down from 0.4% a year ago to 0.3% – the second straight month the US foreclosure rate was at its lowest level for any month since at least January 1999.
"Government and industry relief programs have helped to cushion the initial financial blow of the pandemic for millions of US homeowners," said Frank Martell, president and CEO of CoreLogic. "COVID-19 and the resulting pressures continue to influence the economic activity of many households. Barring additional intervention from the Federal and State governments, we are likely to see meaningful spikes in delinquencies over the short to medium term."
Without further government programs and support, CoreLogic forecasted the US serious delinquency rate to quadruple by the end of 2021, pushing 3 million homeowners into serious delinquency.