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TransUnion: Mortgage Delinquency Rate Continues to Drop Across All Age Groups

CHICAGO, IL--(Marketwired - Aug 20, 2014) - The mortgage delinquency rate (the rate of borrowers 60 days or more delinquent on their mortgages) declined for the 10th consecutive quarter to 3.46% at the end of Q2 2014, according to TransUnion's latest mortgage report. The mortgage delinquency rate has declined nearly 20% in the last year (down from 4.32% in Q2 2013).

TransUnion data indicate that declines in the mortgage delinquency rate are occurring across all age groups. The youngest mortgage borrowers, those below the age of 30, have both the lowest mortgage delinquency rate (2.34%), and have experienced the steepest decline in the last year (down 28.6%). However, this age group also represents a small share of all mortgage accounts -- 4.16%.

Share of Mortgage Accounts/Delinquency Rate by Age Group as of Q2 2014

Age Group   Share of Accounts   60+ Days Mortgage

Delinquency Rate
Under 30   4.16%   2.34%
30-39   17.53%   3.91%
40-49   24.66%   4.43%
50-59   27.06%   3.46%
60+   26.30%   2.58%

"Mortgage delinquency rates continue to drop and we are seeing this decline across all age groups," said Steve Chaouki, head of financial services for TransUnion. "Overall, the improvements in the mortgage delinquency rate can be attributed to a number of factors. These include the clearing of severely delinquent accounts through foreclosure as well as a lower rate of new delinquencies from post-recession vintages, which generally are of significantly higher credit quality and have experienced much better performance than mortgages originated before the recession. This dynamic is likely driving the low delinquencies among younger borrowers. It is encouraging to see younger borrowers perform well, since their generation was significantly impacted by the recession and their loans are among the newest."

All 50 states and the District of Columbia experienced declines in their mortgage delinquency rates between Q2 2013 and Q2 2014. Most major markets also saw yearly drops in their mortgage delinquency rates, including: San Francisco (-29.3%), Phoenix (-28.7%), Miami (-26.7%), Los Angeles (-24.1%) and Chicago (-20.6%). Markets lagging the national average in terms of the rate of delinquency improvement include: Philadelphia (-1.1%), Boston (-4.1%) and New York (-5.5%).

TransUnion recorded 52.8 million mortgage accounts as of Q2 2014, up from 52.4 million in Q2 2013. However, there are more than 10 million fewer accounts as compared to the same period in 2008 (63.4 million).

Viewed one quarter in arrears (to ensure all accounts are reported and included in the data), new account originations dropped 51.1% from 2.2 million in Q1 2013 to 1.1 million in Q1 2014. The share of non-prime originations did rise in the last year, increasing from 5.0% in Q1 2013 to 7.8% in Q1 2014. "The drop in mortgage account originations was dramatic. This resulted from a severe decline in refinance activity due to higher interest rates, compounded by unusually harsh weather conditions across large parts of the country," said Chaouki.

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. To subscribe to TransUnion news releases, please click here

Q2 2014 Mortgage Statistics - Delinquency Rates

Quarter over Quarter   Q1 2014   Q2 2014   Pct. Change
USA   3.61%   3.46%   (4.2%)

Year over Year   Q1 2013   Q2 2014   Pct. Change
USA   4.32%   3.46%   (19.9%)

Mortgage Delinquency Rate for Select States   Q2 2014
California   2.61%
Florida   7.11%
Illinois   3.71%
New York   5.50%
Texas   2.95%

Largest Year-over-Year Declines   Q1 2013   Q1 2014   Pct. Change
Nevada   8.26%   5.54%   (32.9%)
California   3.88%   2.61%   (32.7%)
Arizona   3.90%   2.65%   (32.1%)

Smallest Year-over-Year Declines   Q1 2013   Q1 2014   Pct. Change
West Virginia   2.95%   2.81%   (4.7%)
Pennsylvania   3.98%   3.69%   (7.3%)
Vermont   2.74%   2.51%   (8.4%)

About TransUnion

As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion reaches businesses and consumers in 33 countries around the world on five continents. www.transunion.com/business