Given the number of improvements in many areas of the housing market in the last year or so, it should come as little surprise to observers that borrowers once again successfully slashed both their mortgage debts and instances of late payments in the third quarter of the year.
National delinquency of home loans that were 60 days or more past due slipped once again in the third quarter, to just 5.41 percent of all mortgages, according to the latest statistics from the credit monitoring bureau TransUnion. That was down about 8 percent from the 5.88 percent observed during the same period in 2011, but only a marginal decline from the 5.49 percent observed at the end of this year’s second quarter.
“Continued declines in mortgage delinquency rates are a welcome sign and reflect that relatively more homeowners are able and willing to make their mortgage payments each month,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit. “However, we still have a long way to go to reach more ‘normal’ conditions of a delinquency rate in the 1 to 2 percent range for the U.S. average.”
When it comes to late payments, some of the areas hit hardest by the initial housing downturn are now those experiencing the largest gains, the report said. For instance, Arizona and California were ranked first and second in terms of annual declines in delinquency, at 24.66 and 23.73 percent, respectively. Arizona’s rate now stands at just 5.62 percent, down from 7.46 percent in the third quarter of 2011, while California’s slipped to 5.56 percent from 7.29 percent during the same period.
At the same time, the average amount owed on all mortgages across the country declined as well, the report said. Now, the average borrower owes just $186,445 on their home loan, down 1.01 percent from the $188,341 seen in the second quarter. Further, it’s also a 2.07 percent decline from the $190,382 observed during the same period last year.
Recent statistics also show that with home values rising in many parts of the country, millions more consumers have gotten out from under negative equity on their mortgages, which may put them in a better position to sell their homes in the coming years, or make improvements to their properties.
Image: 401(K) 2012, via Flickr