Mortgage Delinquency Drops for 19th Straight Quarter
By Elizabeth Stewart @ Real Estate Daily
May 15, 2018

The mortgage market has been performing exceptionally well over the past five years. Annually, mortgage delinquencies have fallen every quarter since late 2013, and the serious delinquency rate sits at its lowest point since the great recession.

Since the housing bubble, borrowers have been taking their mortgage payments more seriously. Most lenders stayed away from non-prime borrowers after a hard reality check ten years ago.

Today, most homeowners are making on-time payments, contributing to a healthy mortgage market. As mortgage loan performance continues to improve, mortgage lenders may start targeting non-prime borrowers.

Key Takeaways

  • Annually, mortgage delinquencies dropped for the 19th straight quarter in Q1 2018
  • The serious mortgage delinquency rate decreased to 1.74%, down from 1.79% a year ago
  • Gen Xers (born between 1965 and 1979) had the worst mortgage delinquency rates of all generational groups


The mortgage market performed well in the first quarter of 2018, seeing the 19th consecutive decrease in annual mortgage delinquencies, according to the Q1 2018 Industry Insights Report from TransUnion.

The serious mortgage delinquency rate, or those at least 60 days or more past due, decreased to 1.74% in the first quarter. This is down from 2.07% in the first quarter of 2017, marking the 19th straight annual drop since the third quarter of 2013.

“The opening quarter of 2018 was more of the same on the mortgage delinquency front,” said Joe Mellman, TransUnion senior vice president and mortgage business leader. “Borrowers continue to perform well, making on-time payments that are more in line with traditional patterns observed prior to the mortgage crisis. It is also encouraging that balances continue to increase, as new purchase originations outpace paydowns.”

“As time passes from the housing bubble and mortgage loan performance continues to remain exceptionally low, non-prime borrowers may begin to see their access to mortgage credit open up,” Mellman said. “However, it’s likely that mortgage lenders will approach the non-prime market cautiously, incorporating new alternative data sources to determine which non-prime borrowers offer the least risk.”

And while mortgage delinquencies dropped for all generational groups, one generation stands above the rest as having a higher serious delinquency rate. Gen Xers.

Gen Xers, or those born from 1965 to 1979 had a serious delinquency rate of 2.16% in the first quarter. It may be a higher delinquency rate than other generations, but it is still down 16.6% from last year.

The generation with the next highest delinquency rate was the Silent Generation, or those born up until 1945, whose delinquency rate fell 8.9% annually to 1.74%; followed by Baby Boomers, or those born from 1946 to 1964, who fell 16% to 1.52%; Millennials, those born from 1980 to 1994, who fell 14.5% to 1.41% and Gen Z, or those born from 1995 on, who fell 3.2% to 1.2%.

View the original article at Housing Wire