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Mortgage delinquencies inched up, in part from natural disasters hindering homeowner performance, but a stronger economy is still keeping them low, according to the Mortgage Bankers Association.
The delinquency rate for single-family residential properties rose slightly to 4.47% of all loans outstanding at the end of the third quarter, marking an increase of 11 basis points from the same period a year ago.
The share of loans with foreclosure activity dipped one basis point to 0.23% quarter-over-quarter, the lowest this percentage has been since the fourth quarter of 1985.
“Despite the small [delinquency rate] uptick this quarter, the healthy economy is overall supporting low mortgage delinquencies and foreclosure inventories,” Marina Walsh, vice president of industry analysis at the MBA, said in a press release.
“Unemployment is at its lowest level since 1969, wages have grown 3.1% year-over-year — the biggest jump in almost a decade — and job growth is averaging over 212,000 jobs per month thus far,” she said.
Contributing to the increase in delinquencies in the third quarter were natural disasters like Hurricane Florence and Tropical Storm Gordon, which caused considerable delinquency growth in the affected states of North Carolina, South Carolina, Mississippi, Arkansas and Alabama. It could take several quarters for rates in these areas to return to normal, according to Walsh.
By loan type, delinquencies dropped across the board on a year-over-year basis; the share of delinquencies for conventional loans fell 41 basis points, while the percentage of Federal Housing Administration and U.S. Department of Veterans Affairs loans declined 44 basis points and 8 basis points, respectively.
Corrected November 8, 2018 at 5:21PM: This story has been updated to clarify the MBA report only covers mortgage delinquency data.