Wednesday, 30 September, 2020

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Major Impacts on Delinquency Rates Nationwide

Delinquency rates have been going hand in hand with unemployment, according to the latest CoreLogic MarketPulse Report. In the report, Molly Boesel, Principal, Economist, Office of the Chief Economist at CoreLogic, notes that in August, four of the five states with delinquency rate increases also had increases in unemployment rates.

“Job loss can trigger a loan delinquency, especially for families with limited savings,” said Dr. Frank Nothaft Chief Economist for CoreLogic. “The rise in overall delinquency in Iowa, Minnesota, Nebraska and Wisconsin coincided with a rise in state unemployment rates between August 2018 and August 2019.”

The serious delinquency rate—defined as 90 days or more past due, including loans in foreclosure—was 1.3% in August 2019, down from 1.5% in August 2018. The serious delinquency rate for this August was below the average of 1.5% for the 2000–2006 pre-crisis period and far below the peak of 7.5% in February.

Additionally, Minnesota, Iowa, Nebraska, North Dakota, Montana, New Hampshire, and Utah all saw increases in serious delinquency rates, or loans 90 days or more past due including loans in foreclosure.

On a smaller scale, 47 metropolitan areas recorded small annual increases in overall delinquency rates in August. Some of the highest gains were in the Midwest and Southeast. Metros with the largest increases were Dubuque, Iowa (2.2 percentage points), Pine Bluff, Arkansas (1.1 percentage points), Goldsboro, North Carolina (0.6 percentage points) and Panama City, Florida (0.5 percentage points).

The CoreLogic MarketPulse Report also identified how Amazon’s HQ2 search is impacting local housing. According to Deputy Chief Economist Ralph Ralph McLaughlin, after withdrew its intent to open in New York and focus on Crystal City, noting that in Virginia home markets, notably in and around Crystal City, home prices are rising much faster than last year.

“While evidence is somewhat weak that the HQ2 announcement boosted the regional market, our zip code-level analysis shows a different story,” McLaughlin said. “Namely, that there is a correlation between proximity to the HQ2 site and the increase of home price appreciation over the past year. Of the top 10 zip codes with the largest increase in year-over-year growth rates, half are within a 5- mile distance of the HQ2 site and eight are within 10 miles.”