The percentage of home owners at least two months behind on their payments fell by 21% in the first three months of this year, compared to 2012, according to credit reporting agency TransUnion. The company anticipates the national mortgage delinquency rate will continue to decline in this quarter to about 4.5%.
Do you believe the decline will lead to new listings for sellers who are no longer underwater on their mortgages?
The drastic annual decline in mortgage delinquency rate represents the largest quarterly drop on record for TransUnion, whose data dates back to 1992. This is good news for homeowners who are considering when to sell and who may be burned out by the recent recession.
“We certainly expected improvement this quarter, as the housing sector is in recovery, but the magnitude of the improvement was unexpected,” says Tim Martin, vice president of U.S. housing for TransUnion.
The mortgage delinquency rate was 4.56% in the first quarter. That’s down from 5.78% in the prior-year quarter. The first-quarter rate also fell 12% compared with the last three months of 2012, when it was at a four-year low of 5.19%.
Rising home values make it easier for borrowers to refinance their mortgages or sell their homes if they lose their jobs or become unable to make payments. Additionally, they help bring down the number of homeowners who are underwater on their mortgage.
Last year, 1.7 million homeowners who had been underwater on their mortgage were moved into positive equity, according to CoreLogic. That left another 10.4 million of all homes with a mortgage still in negative equity at the end of the year.
Do you agree these are the reasons delinquent payments have dropped? Tell us your thoughts!
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