The U.S. home loan delinquency rate fell to an 18-year low in the fourth quarter of 2018, according to new data gathered by the Mortgage Bankers Association.
Of all, borrowers with conventional mortgages eligible for sale to government-backed lenders Fannie Mae and Freddie Mac had the highest share of timely repayment, a 97 percent share. About 91 percent of Federal Housing Administration-insured (FHA) mortgage borrowers pay on time, and despite an 8.65 percent delinquency rate, FHA borrowers are better at paying on time now than a decade ago, with a rate of about 14 percent, The Washington Post reports.
Spiking delinquencies in 2007-2008 ushered in the global financial crisis and spawned tidal waves of foreclosures that devastated borrowers and their communities. Some of the wounds are still fresh. Delinquency rates may sound like a yawn, but they are a key economic bellwether that shouldn’t be ignored by anyone serious about real estate.
Overall, says Freddie Mac Chief Economist Sam Khater, U.S. homeowners are performing better today in terms of on-time payments and foreclosure avoidance than they have in 30 years.