Chicago,
18
May
2015

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 13th 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%.

Joe Mellman, vice president and head of TransUnion’s mortgage group
“It’s taken more than seven years, but the mortgage delinquency rate has reached pre-recession levels.  We continue to see a steady decline in the mortgage delinquency rate, primarily driven by strong performance by newer vintage loans. It’s also encouraging to see continued delinquency rate declines for the subprime and near-prime risk groups.”
Joe Mellman, vice president and head of TransUnion’s mortgage group

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

Quarter over Quarter Q4 2014 Q1 2015 Pct. Change
USA 3.29% 2.95% (10.3%

 

Year over Year Q1 2014 Q1 2015 Pct. Change
USA 3.59% 2.95% (17.8%)

 

Mortgage Delinquency Rate for Select States Q1 2015
California 2.00%
Florida 5.15%
Illinois 3.16%
New York 4.82%
Texas 2.55%

 

Largest Year-over-Year Declines Q1 2014 Q1 2015 Pct. Change
Florida 7.60% 5.15% (32.2%)
California 2.78% 2.00% (27.8%)
Nevada 6.02% 4.38% (27.3%)

 

Smallest Year-over-Year Declines Q1 2014 Q1 2015 Pct. Change
Mississippi 4.04% 3.78% (6.4%)
Louisiana 3.61% 3.37% (6.7%)
West Virginia 2.79% 2.60% (6.8%)

 

Q1 2015 Mortgage Statistics – Average Balance per Borrower

 

Quarter over Quarter Q4 2014 Q1 2015 Pct. Change
USA $187,139 $187,175 0.04%

 

Year over Year Q1 2014 Q1 2015 Pct. Change
USA $186,836 $187,175 0.2%

 

Mortgage Balance per Borrower for Select States Q1 2015
California $324,835
Florida $172,374
Illinois $171,696
New York $220,736
Texas $146,471

 

Largest Year-over-Year Increases Q1 2014 Q1 2015 Pct. Change
North Dakota $133,938 $140,564 4.9%
Texas $142,499 $146,471 2.8%
Louisiana $131,651 $134,682 2.3%

 

Largest Year-over-Year Declines Q1 2014 Q1 2015 Pct. Change
Illinois $172,864 $171,696 (0.7%)
Rhode Island $184,984 $184,119 (0.5%)
New Mexico $156,152 $155,570 (0.4%)

 

About TransUnion

Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.

We call this Information for Good. http://www.transunion.com/business

 

 

Media Contacts
photo:Dave Blumberg
Dave Blumberg
Senior Director of Public Relations, U.S. & International
312-985-3059
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