NEW YORK (MainStreet) — Good news on housing and the economy: Mortgage delinquencies are down.
Data from credit rating giant TransUnion shows the national mortgage delinquency rate dropped to 2.95% in the first quarter of 2015 — the first time that figure has sunk below the 3% market since the third quarter of 2007, right before the Great Recession hammered us.
It's the 13th consecutive quarterly drop in delinquency rate. Year-to-year, the delinquency rate is down nearly 18% from the first quarter of last year. It's also way down from the market high of 6.94% in 2010.
There's something to cheer about even in the much maligned subprime mortgage loan market. TransUnion reports that the delinquency rate for subprime consumers fell to 27.23% in the year's first quarter, down nearly 9% from 29.76% in early 2014. (If that sounds big, remember that the rate was a whopping 40.48% in the first quarter of 2010.)
"It's taken more than seven years, but the mortgage delinquency rate has reached pre-recession levels. We continue to see a steady decline in the mortgage delinquency rate, primarily driven by strong performance by newer vintage loans," says Joe Mellman, director of TransUnion's mortgage group. "It's also encouraging to see continued delinquency rate declines for the subprime and near-prime risk groups."
The housing markets across the U.S. that were hardest hit are gaining ground fast on mortgage delinquencies. Miami saw a 36% decline, while San Francisco's mortgage delinquency rate fell by 31%. "It's a positive sign to see double-digit percentage delinquency declines in major markets across the country, as it demonstrates the improvements are widespread — not just a regional phenomenon," Mellman says.