Mortgage delinquency rate up slightly, but is it cause for concern?

There should have been a dip in March due to tax refunds, but this didn't happen.

American homeowners with a mortgage are continuing to meet their monthly payments. But an increasing share are not.

New data from CoreLogic shows that 2.8% of U.S. mortgages were at some stage of delinquency in March, up slightly from a year earlier and unchanged from the previous month. This was seen across 48 states and more than 80% of tracked U.S. metro areas saw serious delinquency rates rise on an annual basis in March, ranging from 1.6% to 0.1%.

“The U.S. delinquency rate increased from a year earlier in March, driven by an uptick in early-stage delinquencies,” said Molly Boesel, principal economist for CoreLogic. “Further, the early-stage delinquency rate remained flat from February to March this year, while it typically falls between those months, as many borrowers receive income tax refunds in March. While monthly changes in the early-stage delinquency rate can be volatile, this break from the seasonal trend comes at a time when household budgets are strained by still-high inflation.”

Here’s how the rates looked in March 2024:

Early-Stage Delinquencies (30 to 59 days past due): 1.5%, up from 1.1% in March 2023.
Adverse Delinquency (60 to 89 days past due): 0.4%, up from 0.3% in March 2023.
Serious Delinquency (90 days or more past due, including loans in foreclosure): 0.9%, down from 1.1% in March 2023 and from a high of 4.3% in August 2020.
Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, unchanged from March 2023.
Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.7%, up from 0.5% in March 2023.

The overall rate remains near historic lows, even with the year-over-year rise, and the nationwide foreclosure rate is also low at 0.3%, the 25^th month at this level. With this signal that mortgage performance remains strong and the low unemployment rate, CoreLogic is not expecting a significant rise in borrowers unable to pay their monthly payments in the coming months.