CHICAGO (5/9/14)--Mortgage delinquencies continue to thin, as the delinquency rate dropped to 3.61% at the end of the first quarter this year; the ninth consecutive quarter of decline, according to TransUnion.
The delinquency rate tracks the number of homeowners who have mortgage payments that are more than 60 days late. Over the last year the delinquency rate has fallen 24%.
"It's encouraging to see mortgage delinquencies drop once again, especially during a period when mortgage originations slowed considerably," said Steven Chaouki, TransUnion head of financial services. "This trend in improved performance is driven in part by lenders working their way through the foreclosure backlog, along with continued conservatism in underwriting new mortgages."
Mortgage originations could pick back up, meanwhile, as Freddie Mac reported Thursday that 30-year-mortgage rates dropped to 4.21%--the lowest number since November. Though, the 30-year rate still stands higher than the lower rates seen a year ago, at 3.42% (MarketWatch May 8).
The average rate for the 15-year fixed-rate mortgage sank to 3.32% as well.
For delinquencies, all 50 states and the District of Columbia saw rates drop in the first quarter, year-over-year. Arizona, California and Nevada experienced the largest percentage declines in delinquencies.
TransUnion also reported that there are nearly 10 million fewer total mortgage accounts than there were at the end of quarter one in 2008.
"While still far from levels seen six years ago, non-prime borrowers are taking a larger share of new originations," Chaouki said. "We have not seen this in quite some time.
Even so, mortgage underwriting remains conservative relative to other primary credit products in the marketplace."