TransUnion: Mortgage Delinquency Rate Drops to Pre-Recession Levels

The mortgage delinquency rate (the rate of borrowers 60 days or more delinquent on their mortgages) declined to 2.95% in Q1 2015 – the first time the variable has been below 3% since prior to the recession in Q3 2007 (2.61%). This also marks the 13^th consecutive quarterly drop in the mortgage delinquency rate (down from 3.29% in Q4 2014). On a yearly basis, the delinquency rate dropped nearly 18% from 3.59% in Q1 2014.

The findings were reported in the latest TransUnion Industry Insights Report, a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the United States.

The delinquency rate for subprime consumers declined to 27.23% in Q1 2015, down nearly 9% from 29.76% in Q1 2014. The delinquency rate for this group of consumers had peaked in Q1 2010 at 40.48%. As a comparison, the delinquency rate for all consumers had also peaked in Q1 2010 at 6.94%.

Every state experienced a yearly decline in their mortgage loan delinquency rate and most major metropolitan statistical areas (MSAs) also saw robust drops in their delinquencies. Notable MSA declines were observed in Miami (down 36.1% from 9.62% in Q1 2014 to 6.15% in Q1 2015) and San Francisco (down 31.1% from 1.92% in Q1 2014 to 1.32% in Q1 2015). “It’s a positive sign to see double-digit percentage delinquency declines in major markets across the country, as it demonstrates the improvements are widespread – not just a regional phenomenon,” added Mellman.

Average mortgage balances per consumer also continued to increase on both a quarterly and yearly basis to $187,175 in Q1 2015. Mortgage balances were at $186,836 at this same time last year, and at $187,139 in Q4 2014.

The share of mortgage balances held by consumers who are currently subprime and near-prime dropped by 9.8% and 2.9% respectively, which is consistent with recent years. Subprime and near-prime consumers currently hold only 32% of the total balances they held at the beginning of 2010. By comparison, prime, prime plus, and super-prime consumers hold roughly the same amount of mortgage balances as they did at the beginning of 2010.

TransUnion recorded 53.0 million mortgage accounts as of Q1 2015, down from 53.4 million in Q1 2014. There are nearly 9 million fewer accounts as compared to Q1 2009 (61.6 million).

Viewed one quarter in arrears (to ensure all accounts are reported and included in the data), Q4 2014 mortgage originations of 277.4 billion accounts is down 6.0% on a quarterly basis, but it is up 10.7% since Q4 2013. Account originations in all risk tiers showed year-over-year growth, with super prime leading the way at 14.1% driven by jumbo loan activity.

This information is reported by TransUnion and is part of its ongoing series of quarterly analyses of credit-active U.S. consumers and how they are managing credit related to mortgages, credit cards, and auto loans.

Q1 2015 Mortgage Statistics – Consumer-Level Delinquency Rates

Q1 2015 Mortgage Statistics – Average Balance per Borrower