LONG BEACH — With America’s coronavirus death toll now approaching at least 100,000 and tens of millions out of work, home mortgage delinquencies are spiking upward at a rate unseen in modern times, the real estate data and analytics company Black Knight reported May 21.
In some ways, the Pacific Northwest is doing comparatively well, however.
Even though their delinquency rates nearly doubled this April compared to a year earlier, Washington and Oregon — along with neighboring Idaho — were among the lowest in the nation in terms of the percentage of homeowners teetering on the edge of foreclosure, Black Knight’s April data showed.
Nation in crisis
“At 6.45%, the national delinquency rate nearly doubled (+3.06%) from March, the largest single-month increase ever recorded, and nearly three times the previous single-month record set back in late 2008,” Black Knight reported.
Nationwide, 3.6 million homeowners were past due on their mortgages as of April 30, the largest number since January 2015. That total includes both homeowners past due on mortgage payments who are not in forbearance, as well as those in forbearance plans who did not make an April mortgage payment. Forbearance plans are formal agreements between lenders and borrowers to delay payments until an agreed-upon future date, by when it is hoped economic and pandemic conditions will have improved.
Despite this grim delinquency total, “Both foreclosure starts and foreclosure sales hit record lows in April as moratoriums halted foreclosure activity across the country,” Black Knight said. Foreclosure starts were down 82% this April compared to April 2019 — a situation likely to dramatically reverse once governor-ordered moratoriums are lifted.
“This is truly uncharted territory,” Andy Walden, economist and director of market research at Black Knight, wrote in an email quoted by the Washington Post. “During the last financial crisis, it took more than a year and a half before we saw the first 1.6 million homeowners fall past due on mortgages as a result. In the economic fallout from covid-19, that many people became past due in April alone.
“Given that just 21 percent of the now 4.75 million homeowners in forbearance have made their May payments so far, this is a trend that is likely to continue.”
Pacific NW states
In April, 3.91% of Washington mortgages were delinquent. Among the 50 states, only Idaho had a lower delinquency percentage — 3.53%. Oregon’s delinquency rate of 4.05% was 46th lowest in the country. Rounding out the bottom five states by non-current percentage were North Dakota — 3.92% delinquent in 48th place — and South Dakota with 3.97 behind on payments in 47th place.
On a superficial level, this might seem like good news for the Pacific Northwest and the Dakotas, but all five states were in much worse shape than a year earlier.
Washington’s April delinquency rate was 92% higher than a year earlier, and nearly two and a half times more than what it was this January, when late payments were the lowest they had been in the past 15 years. Bad as this April’s result was, it will still have to more than double to get back to the record 9.55% delinquency rate reached in January 2012.
Oregon’s April rate was more than 99% more than in April 2019 and is dramatically worse than the 1.77% record low rate set this January, in the midst of a severe housing shortage. Oregon’s worst delinquency rate since 2005 was 9.2% in February 2010 in the aftermath of the housing market collapse.
Idaho’s April delinquency rate was 61.5% worse than April 2019, while North and South Dakota’s rates were 75% and 47% worse, respectively.
Elsewhere in the nation, Mississippi had the highest delinquency rate of 11.9% in April — but this was only about 20% worse than a year earlier. Four states hard hit by the coronavirus — Louisiana, New York, New Jersey and Connecticut — round out the top five states for delinquencies.
See Black Knight’s April report at tinyurl.com/Black-Knight-April-data.