The percentage of homeowners behind in their mortgage payments fell from January through March to the lowest level in 22 years, due in part to low-interest loans, the Mortgage Bankers Association said.
The group’s quarterly National Delinquency Survey showed the seasonally adjusted delinquency rate on one- to four-unit homes was 3.91 percent, down from 4.15 percent in the October-December period of 1994.
It was the lowest since a 3.89 percent rate in the first three months of 1973. Every region in the nation shared in the improvement.
“We’re still benefiting from the refinancing boom of 1991-93, when low interest rates replaced older, higher-rate mortgages,” explained association economist David Lereah. “Surprisingly, even as these newer loans have aged, delinquency rates have remained relatively low.
“One likely explanation is that the refinanced loans, which make up a large portion of services’ portfolios, have already been through the aging process before being refinanced,” he said at a news conference. “Thus, they may not experience the delinquency problems common with the aging of new loans.”
Lereah also said consumers’ total debt payments-including mortgages, auto and credit card payments-as a percentage of their disposable incomes are at historically low levels. This suggests that they are able to meet their payments more easily.
But the Mortgage Bankers Association expects late payments to begin rising slightly with the aging of new purchase loans and the slowing of the economy. Borrower payment problems begin to surface and delinquencies start to rise when mortgages reach their second and third year.
Still, the foreclosure situation remained stable during the first quarter. The percentage of foreclosures dipped to 0.32 percent, from 0.33 percent in the fourth quarter.
The association’s quarterly survey covers about 20 million mortgages, or about one-third of all residential loans outstanding.
During the first quarter, 30-day delinquencies fell to 2.60 percent from 2.76 percent three months earlier. Loans 60 days past due fell to 0.60 percent from 0.66 percent, and those 90 days late slipped to 0.71 percent from 0.73 percent.
The delinquency rate for conventional loans was 2.45 percent, down from 2.63 percent in the final three months of 1994. Delinquency rates for VA loans declined to 6.05 percent from 6.35 percent; and for FHA loans, to 7.09 percent from 7.40 percent.
The delinquency rate fell to 3.23 percent from 3.49 percent in the West, to 3.36 percent from 3.59 percent in the North Central region, to 4.06 percent from 4.16 percent in the Northeast and to 4.49 percent from 4.81 percent in the South.
