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A recent survey by the Mortgage Bankers Association found that mortgage delinquency rates fell for the second quarter in a row, to the lowest level in 43 years.
The one- to four-family mortgage delinquency rate fell to 3.45% of total loans outstanding in Q3, a seasonally adjusted percentage decrease of 19 bps from Q2 and 143 bps from Q3 2021.
MBA Vice President of Industry Analysis Marina Walsh noted that foreclosures also fell below historical averages in the third quarter, to 0.15 percent and 0.56 percent, respectively.
As Per Walsh, very few delinquent homeowners work with mortgage brokers to find alternatives to foreclosure, including credit training to keep their homes.
In the latest MBA forecast, Walsh noted that a recession is likely in the first half of 2023 due to tightening financial conditions, falling business investment, and slowing global growth.
As a result, the unemployment rate is expected to reach 5.5% by the end of next year, almost 2 percentage points higher than the October 2022 forecast of 3.7%.
According to Walsh, tolerance may increase due to expected increases in unemployment and the impact of natural disasters such as Hurricane Ian in Florida, South Carolina, and other states, which could increase delinquency rates from current lows in the next quarter.
Reference Source: MPA
