CHICAGO (12/16/13)--Mortgage delinquencies are expected to decline for the fifth straight year in 2014, but at a slower rate than previous years, according to an annual forecast.
Credit analysis firm TransUnion said that mortgage delinquencies are expected to fall to 3.75% at the end of 2014, down from 3.94%, the predicted rate for the end of 2013.
If correct, the predicted delinquency rate will decline at 4.82%. In 2010, 2011 and 2012, it fell by 6%, 7%, and 15%. It is expected to decline by 23% this year.
A TransUnion executive said that rising mortgage interest rates will abate the decline, with the cost of refinancing and the time it takes to sell homes set to rise (American Banker Dec. 12).
Delinquency rates are still expected to be at historic lows--they were at 6.88% at the end of 2009, and 6.44% at the end of 2010.
Among states with the largest projected delinquency rate declines are those forecast to have the highest overall incidence of delinquency. TransUnion predicts that delinquency in Nevada, Florida, and New Jersey will decline by 25.17%, 15.31% and 10.17%. Florida will lead the nation with the highest delinquency rates, at 7.21%, with New Jersey and Nevada in second and third at 6.11% and 5.38%.
TransUnion expects mortgage delinquency to rise by 47.72% in North Dakota, but said the state will have the second lowest rate, at 1.94%.
The firm's analysts also predict that credit card delinquencies will increase by nearly 10% next year, to 1.66% from a predicted 1.51% at the end of 2013.
From 2007 to 2012, year-end credit card delinquency rates averaged 2.38%.
TransUnion, which is based in Chicago, accounts for consumer confidence, unemployment rates, gross state product and real estate values when making its forecasts.
The firm considers mortgage debtors and credit card borrowers to be delinquent if they are 60 days or more and 90 days or more past due on respective loan payments.