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Mortgage delinquency rates improve, though still behind

By Madison Parry

Despite a decline in mortgage delinquencies, the rate of improvement is slowing, predictions showing that if the current rate of progress remains, payments on more than a million loans will be behind when forbearance programs start to end in March 2021.

Although there has been improvement in mortgage payments as data shows that mortgage delinquencies are on the decline, the same shows that improvement is beginning to slow, according to a Monday report by Zillow.

In August, 6.88 percent of outstanding mortgages were at least 30 days behind on payments, reports Zillow, revealing an improvement of just 0.03 percent from July.

This showed to be well down from the 0.85 percent decline from June to July. The pace of recovery, however, has begun to experience a slowdown over the last three months.

Should the current rate of recovery remain, predictions indicate that payments on more than a million loans will be behind when 12-month forbearance programs that began in spring 2020 start to end in March 2021.

Going by the rate of progression, Zillow reports that it will take 19 months – until March 2022 – before delinquencies return to pre-COVID-19 levels.

However, August data optimistically shows the increase in serious mortgage delinquencies was the smallest in months, reports Zillow, and that the inflow of new mortgage delinquencies continues to shrink.