Residential Delinquencies Jump; Most Housing Markets Worse Off

The U.S. mortgage delinquency rate has risen month-over-month. According to RealtyTrac, most housing markets that the company studied are "worse off than four years ago."

LPS (Lender Processing Services Inc.) reported on Monday that the U.S. mortgage delinquency rate rose to 7.4 percent in September from 6.87 percent in August, a month-over-month spike of 7.72 percent. Compared with the same month last year, however, delinquencies were dow 4.19 percent. LPS calculates the rate based on loans more than 30 days past due, but not yet in foreclosure.

All together, there are about 3.7 million mortgages nationwide that are 30-plus days delinquent without being in foreclosure, calculates LPS. Of those, 1.53 million are 90 days or more over due, but without being in foreclosure yet. Some 1.94 million properties have been foreclosed, but aren’t formally on the market.

According to LPS, the states with the highest percentage of non-current loans — delinquencies plus foreclosed properties that haven’t been put on the market — are Florida, Mississippi, and New Jersey (with Nevada in the fourth slot). The states with the lowest percentage of non-current loans are Montana, Arkansas and South Dakota.

Most Housing Markets Worse Off Than in 2008

RealtyTrac said on Monday that 65 percent of the 919 housing markets (by county) that the company studied are “worse off” than four years ago, just as the Great Recession hit. The real estate data specialist measured the markets by five different metrics — average home prices, unemployment, and higher foreclosure inventories, foreclosure starts and distressed sales — and to count as worse off, at least three of the five metrics had to show some deterioration in the last four years.

Some 580 counties of the 919 total had three or more declining metrics. By contrast, only 315 (35 percent) of the counties have experienced improvement of three or more metrics.

“The U.S. housing market has shown strong signs of life in recent months, but many local markets continue to struggle with high levels of negative equity as the result of home prices that are well off their peaks,” Daren Blomquist, vice president at RealtyTrac, said in a statement. “In addition, persistently high unemployment rates are hobbling a robust real estate recovery in most areas.”

Wall Street recovered from its “Black Monday” 25th anniversary drop last Friday by just about breaking even on Monday. The Dow Jones Industrial Average eked out a 2.38-point gain, or 0.02 percent, while the S&P 500 was up 0.04 percent and the Nasdaq gained 0.38 percent.