Fewer Americans Late on Mortgages in Third Quarter

Paying mortgageBy ALEX VEIGA

LOS ANGELES -- U.S. homeowners are doing a better job of keeping up with their mortgage payments, aided by an improving housing market and low interest rates that are making it easier to refinance.

The percentage of mortgage holders at least two months behind on their payments fell in the third quarter to 5.41 percent, the lowest point in more than three years, credit reporting agency TransUnion said Tuesday.

The rate was down from 5.49 percent in the second quarter and was nearly 8 percent below the 5.88 percent rate in the third quarter last year, the company said.

The mortgage delinquency rate hasn't been this low since the first quarter of 2009. Still, it remains well above the 1 percent to 2 percent average historical range, an indication that many homeowners still are struggling to make their payments.

Many homeowners changed the way they prioritize their financial obligations after the value of their homes plummeted with the housing crash. That has yet to change.

"People used to pay their mortgage first, and now they pay their auto and their credit cards before their mortgage," said Tim Martin, group vice president of U.S. housing for TransUnion. "We think that's probably still in place."

Even so, some homeowners are benefiting from the gradual turnaround in housing this year.

U.S. home prices jumped 5 percent in September compared with a year ago, the largest year-over-year increase since July 2006, according to data provider CoreLogic.

Higher prices help bring down the number of homeowners who owe more on their mortgages than their homes are worth, potentially making it easier for them to lower their monthly payments by refinancing.

And interest rates remain near record lows, making it possible for more homeowners to qualify for refinancing. The average rate on a 30-year mortgage was 3.40 percent last week and has been below 4 percent all year.

Meanwhile, there are some signals that the job market is improving. Employers added 171,000 jobs in October and hiring in August and September was much stronger than first estimated. The economy has gained an average of 173,000 jobs a month since July. That's up from 67,000 a month in April through June.

Still, unemployment remains stubbornly high at just under 8 percent.

At the state level, Florida led the nation in the third quarter with the highest mortgage delinquency rate of any state at 13.09 percent. It was followed by Nevada at 10.93 percent; New Jersey at 8.33 percent; and, Maryland at 6.86 percent.

The states with the lowest delinquency rate were North Dakota at 1.44 percent; South Dakota at 2.21 percent; Nebraska at 2.25 percent; and, Alaska at 2.48 percent.

TransUnion anticipates the national mortgage delinquency rate will decline slightly in the fourth quarter to about 5.35 percent, even though some cash-strapped homeowners typically elect to put off making some of their debt payments so they can spend on holiday shopping.

The company's research is culled from TransUnion's database of 27 million anonymous consumer records.

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13 Comments

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rjs

the MBA shows the actual unadjusted delinquency rate for the quarter was at 7.64% in the 3rd quarter, and LPS puts it at 7.40% at 9/30/12

November 17 2012 at 8:41 PM Report abuse rate up rate down Reply
ectullis

Could it be that their are fewer mortgages?

November 14 2012 at 10:51 AM Report abuse +1 rate up rate down Reply
bchrist751

One Reason why this is happening is that those who should never been approved for a Mortage have been forclosed on.... Look around your own neighborhoods,those homes that were once nice were destroyed and now new responsable owners have purchased them and repairing the damage.

November 14 2012 at 10:26 AM Report abuse +1 rate up rate down Reply
cpo1514

Of course the late payments are declining... after a few years of foreclosures the banks own the property!

November 14 2012 at 9:27 AM Report abuse +1 rate up rate down Reply
Greg and Mel

Fewer delinquencies are due to so many people who had their homes taken from them by the banks after most of them lost their jobs, could no longer afford the current payments, and the banks refusing to refinance or modify their loans even when the home owners gave them the money in bail outs to do so! Most people lived in their homes for decades, raised families, and paid their mortgages on time every month only to lose it all, and nobody has done anything to stop this, or help the millions of Americans who tried for years to save their homes and all the money they poured into maintaining them, improving them, and paying for them responsibly month after month. The sugar coating of the disgusting situation this country has been in is becoming an outrage because we are the millions of peoplewho are the ones living with it and paying the price of this never ending corruption! Reading the comments below show nobody is fooled by any of the stupid rosy stories spewing from our brainless officials and bankers who think fraud and corruption will last forever. Just stop and get out while you still can!

November 13 2012 at 5:26 PM Report abuse rate up rate down Reply
howlar2

That's to be expected since most of the deadbeats have already been weeded out.

November 13 2012 at 3:57 PM Report abuse +6 rate up rate down Reply
1 reply to howlar2's comment
harlson

evry post minus yours says the truth!

however.. it's idoits as you that California kept death penalty!

November 13 2012 at 9:54 PM Report abuse -3 rate up rate down Reply
1 reply to harlson's comment
cpo1514

Soon, your tent will be foreclosed as The bamster will raise your taxes to at least 5% from your current 0% rate,

November 14 2012 at 9:29 AM Report abuse +1 rate up rate down
George

Guess more have lost their homes so can't be late anymore. More crap figures to try and convince us things are getting better. Love the figures stating that home values have risen 35% in some areas. 35% of low value means you have still lost your butt and might be able in 5 more years to climb out of the hole if you have a ladder and your arms are long enough. Until new home growth bringing back the millions of construction workers the news is bull!!

November 13 2012 at 10:34 AM Report abuse +5 rate up rate down Reply
Condley

Duh! The fewer mortages there are, the fewer late payments there will be. It would be a good thing if some of these writers had some common sense.

November 13 2012 at 9:54 AM Report abuse +7 rate up rate down Reply
lpi2007

The Headline is so damn STUPID, after millions upon millions behind , millions lost their homes and AOL says fewer. ROLLING ON THE FLOOR LAUGHING MY ASS OFF..... WHAT MORONS

November 13 2012 at 9:44 AM Report abuse +4 rate up rate down Reply
jj2301

Why report the 11 million foreclosures already in the pipeline? Those are going to be foreclosures and the banks know it, so let's not talk about it and get people spending for the holidays!

I'm buying little to nothing this year, to celebrate the coming fiscal cliff and the fact that I'll get to carry six 47%ers this year, instead of 5.

November 13 2012 at 9:41 AM Report abuse +6 rate up rate down Reply