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TransUnion: National Mortgage Loan Delinquency Rate Continues Downward Track in Third Quarter

CHICAGO, IL--(Marketwire - Nov 13, 2012) - The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) declined slightly for the third consecutive quarter, dropping from 5.49% in Q2 2012 to 5.41% in Q3 2012. On a year-over-year basis, the mortgage delinquency rate has declined nearly 8% from 5.88% in Q3 2011. 

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.

"Continued declines in mortgage delinquency rates are a welcome sign and reflect that relatively more homeowners are able and willing to make their mortgage payments each month," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. "However, we still have a long way to go to reach more 'normal' conditions of a delinquency rate in the 1-2% range for the U.S. average." 

Twenty-two states experienced improvement in their mortgage delinquency rates from last quarter. Forty-two states experienced improvement from last year. 

Interestingly, at a more granular level only 49% of metropolitan areas saw quarterly improvement in their mortgage delinquency rates in Q3 2012. This is a significant departure from the previous two quarters, when 76% (Q2 2012) and 73% (Q1 2012) of the MSAs experienced improvement.

Arizona and California, two of the states most negatively impacted by the mortgage crisis, experienced the greatest improvement in mortgage delinquency rates on a year-over-year basis. Since the third quarter of 2011, Arizona's has dropped nearly 25% from 7.46% to 5.62%. California has dropped almost 24% in that same time, from 7.29% to 5.56%. Currently, only two states remain with double-digit delinquencies -- Florida at 13.09% and Nevada at 10.93% -- and both of those states showed improvement year over year. 

The District of Columbia experienced the largest year-over-year increase in mortgage delinquency rate, up over 11% from 5.47% to 6.10%. Eight states also experienced year-over-year increases with New Jersey registering both the highest overall rate of the group at 8.33% and the largest increase, up nearly 10% year over year.

TransUnion expects the mortgage delinquency rate to fall again in the 4th quarter, but only slightly. "It's generally tough to expect improvement in delinquency rates in the fourth quarter of the year given the extra demands on household income that many experience during the holiday season," said Martin. "However, we saw some improvement in the housing market in the third quarter with regard to house prices, home sales and increased refinance activity, and we believe we will start to see these numbers reflected in improved mortgage delinquency next quarter. As such, we forecast the year-end delinquency rate to improve to something in the 5.25%-5.35% range."

TransUnion's forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income, and real estate values. The forecast would change if there are unanticipated shocks to the economy affecting recovery in the housing market or if home prices fall more than expected

Q3 2012 Mortgage Statistics - Delinquency Rates

Quarter over Quarter   Q2 2012   Q3 2012   Pct. Change
USA   5.49%   5.41%   (1.46%)

Year over year   Q3 2011   Q3 2012   Pct. Change
USA   5.88%   5.41%   (7.99%)

Highest Mortgage Delinquency States Q3 2012
Florida 13.09%
Nevada 10.93%
New Jersey 8.33%
Maryland 6.86%

Lowest Mortgage Delinquency States   Q3 2012
North Dakota   1.44%
South Dakota   2.21%
Nebraska   2.25%
Alaska   2.48%

Top 3 Year-over-Year Increases   Q3 2011   Q3 2012   Pct. Change
District of Columbia   5.47%   6.10%   11.52%
New Jersey   7.60%   8.33%   9.61%
Arkansas   3.62%   3.83%   5.80%

Top 3 Year-over-Year Declines   Q3 2011   Q3 2012   Pct. Change
Arizona   7.46%   5.62%   (24.66%)
California   7.29%   5.56%   (23.73%)
Minnesota   3.53%   3.00%   (15.01%)

Q3 2012 Mortgage Statistics - Mortgage Debt Per Borrower

Quarter over Quarter   Q2 2012   Q3 2012   Pct. Change
USA   $ 188,341   $ 186,445   (1.01%)

Year over Year   Q3 2011   Q3 2012   Pct. Change
USA   $ 190,382   $ 186,445   (2.07%)

Highest Mortgage Debt States Q3 2012

District of Columbia $ 374,492
California $ 323,934
Hawaii $ 310,373
Maryland $ 247,931

Lowest Mortgage Debt States Q3 2012

West Virginia $ 102,817
Mississippi $ 107,841
Oklahoma $ 112,996
Arkansas $ 114,487

Top 3 Year-over-Year Increases   Q3 2011   Q3 2012   Pct. Change
North Dakota   $ 118,686   $ 122,895   3.55%
Iowa   $ 121,607   $ 125,530   3.23%
South Dakota   $ 137,555   $ 140,581   2.20%

Top 3 Year-over-Year Declines   Q3 2011   Q3 2012   Pct. Change
Hawaii   $ 334,606   $ 310.373   (7.24%)
Nevada   $ 223,813   $ 209,656   (6.33%)
California   $ 339,546   $ 323,934   (4.60%)

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion 2Q12 Mortgage Statistics

TransUnion Mortgage Loan Modification Study

TransUnion Payment Hierarchy Study

TransUnion Life After Foreclosure Study

TransUnion on Twitter

TransUnion's Trend Data database

TransUnion's Trend Data is a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels.

About TransUnion

As a global leader in information and risk 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 high quality data, and integrating advanced analytics and enhanced decision-making capabilities. 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 32 countries around the world. www.transunion.com/business