Fannie and Freddie: Single Family Serious Delinquency Rate Decreased, Multi-family Decreased in March
CoreLogic: "US Mortgage Delinquency, Foreclosure Rates Hover Near Historic Lows"
Single-family serious delinquencies decreased in March, and multi-family serious delinquencies decreased again after the huge surge in January.
Freddie Mac reported that the Single-Family serious delinquency rate in March was 0.52%, down from 0.54% February. Freddie's rate is down year-over-year from 0.62% in March 2023. This is below the pre-pandemic lows. Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.
Fannie Mae reported that the Single-Family Serious Delinquency decreased to 0.51% in March from 0.53% in February. The serious delinquency rate is down from 0.59% in February 2023. This is also below the pre-pandemic lows. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.
These are mortgage loans that are "three monthly payments or more past due or in foreclosure". Mortgages in forbearance are being counted as delinquent in this monthly report but are not reported to the credit bureaus.
For Fannie, by vintage, for loans made in 2004 or earlier (1% of portfolio), 1.56% are seriously delinquent (down from 1.60% the previous month).
For loans made in 2005 through 2008 (1% of portfolio), 2.30% are seriously delinquent (down from 2.36%).
For recent loans, originated in 2009 through 2023 (98% of portfolio), 0.45% are seriously delinquent (down from 0.46%). So, Fannie is still working through a handful of poor performing loans from the bubble years.
Multi-Family Delinquencies Decreased
Freddie Mac reports that the multi-family delinquencies rate declined to 0.34% in March, down from 0.35% in February, and down from 0.44% in January.
This graph shows the Freddie multi-family serious delinquency rate since 2012. Rates were still high in 2012 following the housing bust and financial crisis.
The multi-family rate increased following the pandemic and has increased recently as rent growth has slowed, vacancy rates have increased, and borrowing rates have increased sharply. The rate surged higher in January but declined in February and March - but is still at a high level. This will be something to watch as more apartments come on the market.
CoreLogic: “US Mortgage Delinquency, Foreclosure Rates Hover Near Historic Lows”
Here is a report on loan performance from CoreLogic: CoreLogic: US Mortgage Delinquency, Foreclosure Rates Hover Near Historic Lows in February
CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report for February 2024.
In February 2024, 2.8% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), down year-over-year from February 2023 and unchanged month over month from January 2024.
To gain a complete view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquencies. In February 2024, the U.S. delinquency and transition rates and their year-over-year changes, were as follows:
• Early-Stage Delinquencies (30 to 59 days past due): 1.5%, up from 1.4% in February 2023.
• Adverse Delinquency (60 to 89 days past due): 0.4%, unchanged from February 2023.
• Serious Delinquency (90 days or more past due, including loans in foreclosure): 0.9%, down from 1.2% in February 2023 and from a high of 4.3% in August 2020.
• Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, unchanged from February 2023.
• Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.7%, unchanged from February 2023.
“The U.S. delinquency rate fell from a year earlier for the first time in six months in February, indicating that mortgage performance remains strong,” said Molly Boesel, principal economist for CoreLogic. “The decrease in delinquencies was driven by the decline in the share of mortgages that were six months or more past due, a number that has been consistently shrinking and fell to its lowest level in 15 years in February.”
“As later-stage delinquencies decrease,” Boesel continued, “the share of mortgages in foreclosure remained at 0.3% in February, where it has been since March 2022 and only slightly higher than the all-time low.”
emphasis added
A key is to watch early-stage delinquencies (recent borrowers) and that remains low.