Understanding November 2023 Mortgage Performance in the U.S.
Introduction
In examining the recent trends within the U.S. mortgage market, the November 2023 data released by Intercontinental Exchange, Inc. (ICE) provides a comprehensive insight into the current landscape. This “First Look” report sheds light on crucial metrics, highlighting shifts and fluctuations in mortgage performance nationwide.
National Delinquency Rate
The national delinquency rate, standing at 3.39% in November, exhibits a nuanced trajectory. Despite a nominal increase of 10 basis points from the preceding year, it notably rests 64 BPS lower than pre-pandemic levels. This juxtaposition signals a steady recovery but prompts attention to certain pivotal aspects.
Key Findings Analysis
FHA Loans
The report flags a concerning upswing in delinquency rates among FHA loans, reaching a nine-year pinnacle, excluding the immediate post-pandemic phase. This development underscores the need for vigilance and proactive measures in 2024 to mitigate potential escalations.
VA Loans
Concurrently, early-stage delinquencies among VA loans have surged, reminiscent of levels observed in 2009. Notably, this upsurge correlates with the impact of escalating interest rates on recently originated loans, substantiating the influence of market variables on loan performance.
GSE Mortgages
Conversely, GSE mortgages exhibit commendable resilience. Early-stage delinquencies within this domain demonstrate robustness, maintaining levels substantially below the national average at 1.51%. This resilience reflects the stability within this sector amidst broader market fluctuations.
Delving Deeper into Statistics
Serious Delinquencies
While serious delinquencies (90+ days past due) have ascended to 459K, this figure is notably down by a substantial 21% from November 2022, showcasing a year-over-year improvement despite a recent uptick.
Foreclosure Trends
Foreclosure starts witnessed a decline of 12.2% in November, with active foreclosure inventory plummeting to 216K, marking reductions of 23% and 24% from 2019 levels, respectively. These declining figures underscore a gradual but consistent recovery within this domain.
Prepayment Activity
Prepayment activity witnessed a decline, attributed partly to seasonal homebuying patterns and the residual effects of a surge in 30-year rates exceeding 7.75% in the preceding month. This decline underscores the influence of market dynamics on borrower behavior.
Overview of November 30, 2023, Data
- Total U.S. loan delinquency rate: 3.39%
- Month-over-month change: 3.95%
- Year-over-year change: -2.88%
- Total U.S. foreclosure pre-sale inventory rate: 0.41%
- Month-over-month change: -0.40%
- Year-over-year change: -8.18%
- Total U.S. foreclosure starts: 29,000
- Month-over-month change: -12.19%
- Year-over-year change: 6.70%
Geographical Insights
Top and Bottom States by Non-Current Percentage
The top states exhibiting higher non-current percentages include Mississippi, Louisiana, Alabama, Indiana, and Arkansas. Conversely, California, Idaho, Washington, Montana, and Colorado feature among the bottom states, displaying notably lower non-current rates.
Top States by 90+ Days Delinquent Percentage
Mississippi, Louisiana, Alabama, Arkansas, and Georgia top the list concerning 90+ days delinquent percentages, signifying areas necessitating focused attention to address delinquency concerns.
State-wise Changes in Non-Current Percentage
States like Alaska, Vermont, Rhode Island, North Dakota, and New Hampshire depict significant reductions in non-current percentages over the past 12 months. Conversely, Idaho, Louisiana, South Dakota, Hawaii, and Texas display less favorable trends in this aspect.
The November 2023 mortgage performance overview underscores a landscape of nuanced fluctuations, with various loan categories experiencing distinct trajectories. While certain segments exhibit resilience, others demand vigilant observation and strategic intervention to sustain market stability.