Despite the cost of living, Americans remain on top of their mortgages

Stats reveal that all stages of delinquency are around historic lows.

Squeezed household budgets may be forcing some American homeowners to tap savings accounts for their monthly mortgage payments but it’s helping maintain low delinquency rates.

Keeping a roof over their heads and ensuring that their largest asset is protected means that the U.S. overall mortgage delinquency (2.8%), adverse delinquency (0.4%), foreclosure (0.3%) and transition rates (0.7%) were all essentially unchanged in February compared to a year earlier.

Data from CoreLogic’s Loan Performance Insights Report shows that the stats are around historic lows and that with a $1.3 trillion increase in home equity year-over-year in the third quarter of 2023, there should be enough in the tank to protect most homeowners from foreclosure.

“The U.S. delinquency rate fell from a year earlier for the first time in six months in February, indicating that mortgage performance remains strong,” said Molly Boesel, principal economist for CoreLogic. “The decrease in delinquencies was driven by the decline in the share of mortgages that were six months or more past due, a number that has been consistently shrinking and fell to its lowest level in 15 years in February. As later-stage delinquencies decrease, the share of mortgages in foreclosure remained at 0.3% in February, where it has been since March 2022 and only slightly higher than the all-time low.”

However, the report highlights the areas where things are not quite so rosy. Overall delinquency rates increased year-over-year in February in 56 U.S. metro areas, led by Kahului-Wailuku-Lahaina, Hawaii (up by 1.6 percentage points), followed by Hinesville, Georgia and New Orleans-Metairie, Louisiana (both up by 0.4 percentage points).

While those already owning a home appear to be managing for now, those trying to get on the housing ladder continue to find the barriers rising.

Recent research found that that the average down payment in 2023 reached an all-time high of $84,000 or 16% of the purchase price.