Home loan delinquencies in the United States increase 70% from last year

The US mortgage default rate in April 2020 has climbed 70% above its level a year ago, according to a recent report by real estate data firm CoreLogic. (iStock)

The US mortgage default rate in April was 70% higher than a year ago, according to a recent report by real estate data company CoreLogic.

This growth has been fueled by early-stage defaults – loans with 30 to 59 days overdue. April’s early-stage delinquency rate of 4.2% was more than double the April 2019 rate. However, severe defaults, with late payments of at least 90 days, fell to 1. 2% of loans, their lowest level since June 2000.

Although defaults have increased in each of the 10 largest metropolitan areas, home loans in some places have performed better than others. Typically, subways where governments enacted work and travel restrictions in March to curb traffic coronavirus The outbreak recorded higher crime rates in April than places that adopted restrictions later.

Miami

The main metropolitan area with the highest delinquency rate was Miami, where the county mayor order all non-essential businesses will close in March but where coronavirus cases have recently skyrocketed. Miami’s mortgage default rate was the highest among the top 10 metropolitan areas in terms of population in April 2020, reaching 11.5%. This was an increase of 6.7 percentage points and an increase of 140 percent from a year ago.

New York City

Next on the list is New York City, where the delinquency rate in April climbed to 10.4%, more than double its level at the same time last year.

New York City was hit early and hard by the coronavirus outbreak and has become its global epicenter in mid-March, accounting for 5% of all cases worldwide. New York Governor Andrew Cuomo and New York Mayor Bill de Blasio then took aggressive action to curb the spread of the virus by enacting travel restrictions, to eat, and all non-essential work.

Weeks after the first confirmed cases of coronavirus in the United States, thousands of New Yorkers lost their jobs that hotels, retailers and construction companies have laid off or put off staff. Cash strapped, New York borrowers have been thrice more likely to ask for forbearance on their home loans than the typical borrower, according to a To analyse of 22,000 mortgages across the United States.

Las Vegas

The lion’s share of Vegas labor is in the leisure and hospitality industry, so hotel closures sent jobless claims skyward and decimated the budgets of many residents. The outlook for the coming months does not look much better, with job losses linked to the coronavirus estimated at double those of the 2007-2009 recession. This translated into a decline in loan performance: in April 2020, the mortgage default rate in Las Vegas fell to 8.5%, from 3.2% a year earlier.

Houston

The crime rate in the self-proclaimed “energy capital” of the United States jumped to 8.2% in April 2020, from 4.5% a year earlier. Houston is experiencing two overlapping global crises: the pandemic and crater oil price caused by a price war between Saudi Arabia and the Russian Federation. The major oil companies headquartered in Houston have punish thousands of employees and some 200,000 to 300,000 workers could lose their jobs, by some estimates.

Chicago

Metro Chicago’s delinquency rate in April 2020 was 6.6%, up from 4% a year ago. Compared to other cities, this may seem relatively modest, but the clouds have been gathering for some time over the Chicago residential market: Cook County, which encompasses Chicago, ranks among the top 50 counties. vulnerable countries in terms of foreclosure risk, according to a recent report by ATTOM Data Solutions.


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