As the national housing market continues to recover from large levels of foreclosures and delinquencies in many parts of the country, the Mortgage Bankers Association's National Delinquency Survey for the final quarter of 2012 revealed the delinquency rate for mortgage loans dropped to the lowest level in four years.
According to the report, the delinquency rate dropped to 7.09 percent in the fourth quarter, down 31 points from the quarter before. When compared to the rate from the fourth quarter of 2011, 2012's Q4 was 49 points lower. This is not typical of the transition from the third to fourth quarters, but MBA noted the rate also dropped on an unadjusted basis by 13 points to 7.51 percent from 7.64 percent.
When looking at foreclosure actions initiated in the fourth quarter, starts were at their lowest level since 2007, as they fell 20 points from the third quarter and dropped 29 points from the final quarter of 2011. The number of foreclosed houses in the process also fell to 3.74 percent, down 33 points from the quarter before and a significant 64 points lower than seen a year ago.
Some states continue to struggle with higher delinquency rates than seen in other states that were either not hit hard by foreclosures during the housing market slump or where buying increased last year. Data from the survey noted 12 percent of mortgages in Florida are in the process of foreclosure. Despite being down from 14.5 percent recorded in the fourth quarter a year earlier, this rate is still high in comparison to other states. In addition, Florida is credited with inflating the national rate.
"We are seeing large improvements in mortgage performance nationally and in almost every state," said Jay Brinkmann, chief economist and senior vice president of research for MBA. "The 30 day delinquency rate decreased 21 basis points to its lowest level since mid-2007. With fewer new delinquencies, the foreclosure start rate and foreclosure inventory rates continue to fall and are at their lowest levels since 2007 and 2008 respectively."
While many economists have suggested it would be more difficult to convince Americans who witnessed the housing market slump to make the investment, property data shows affordability provided by mortgage rates and an overall healthier market have helped push sales to record highs not seen since 2006.