The national housing news are getting better, one step at a time. The direction is cautious to be frank but so long as it is going down the right path home loan and real estate industry participants can continue making strategic plans for the future. In fact, the entire economy needs a stable housing market to be able to emerge in full force from the funk it is desperately trying to escape from now.
TransUnion, one of the big three credit information boutiques around that also provides data for the FICO score, publishes a quarterly report on mortgage delinquencies, which are loans that are 60 or more days late. In its quarter 3 of 2012 report the national rate inched down to 5.41% from Q2 when it hovered at 5.49%. Small improvement but one nevertheless. On a year-over-year comparison the slide looks a little better since the Q3 of 2011 stood at 5.88%. The trend obviously is downward, yet the mortgage delinquency rate still is far from being what is considered to be typical nationally, which on average is 1-2%. The gap is still quite wide.
Florida’s rate for Q3 came in at 13.09%, being the highest among all states. The next highest was Nevada at 10.93%. New Jersey’s 8.33% was third and somewhat surprisingly Maryland’s 6.86% fourth. Especially the top two states – although their numbers have improved - have a long way to go to reach anything resembling what is called normal.
Arizona and California, two states that had also been hammered hard in the mortgage meltdown, showed the best progress on a year-over-year basis. Arizona lowered its home loan delinquency percentage from 7.46% to 5.62%, a strong 24.66% change for the better. California nearly matched that by generating a 23.73% improvement, from 7.29% down to 5.56%.
Is the widely believed normal – or pre-real estate crash - national mortgage delinquency rate of 1-2% attainable? It is. It clearly will take a few more years to get there, though, based on the current pace. The problems that upended the mortgage and housing markets were that profound. The post-crash tougher underwriting parameters launched by Fannie Mae, Freddie Mac, FHA and the entire private lending industry are turning out a much cleaner generation of mortgages that should in time trim the rate down to the old benchmark.
To speed the process up would require a steady stream of positive economic news and currently they are merely trickling in. To complicate matters is the baffling irresponsibility of the House leadership here in Washington that seems to be putting additional strain and uncertainty on the nascent economic recovery. What is badly needed now are leaders who will put the nation’s best interests first, not hiding behind some misguided, depleted ideology.
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