Mortgage delinquency decline expected in 2013
Posted on Wednesday, December 12, 2012 at 4:53:53 PM
Following the end of the recession, consumers worked to improve the way they handle debt. As a result, the mortgage delinquency rate declined significantly in recent years and is expected to continue doing so in 2013.
Next year, the rate of consumers who are 60 or more days behind on mortgage payment is forecast to fall to 5.06 percent, from 5.32 percent in 2012, according to a report from TransUnion. Although this is a notable improvement, the rate is still well above the 1.94 percent recorded prior to the real estate bubble burst.
"As house prices and unemployment slowly improve, TransUnion's forecast indicates that the national mortgage delinquency rate will gradually drop throughout 2013," said Tim Martin, group vice president of U.S. housing in TransUnion's financial services business unit.
On a state-by-state basis, Nevada, Minnesota, California and Arizona, had mortgage delinquency rates well above the national average, the report said.
However, the potential improvement next year could also be the result of mortgage rates hovering near all-time lows, as well as a number of government initiatives, such as the Home Affordable Refinance Program, helping struggling borrowers avoid delinquency.