The foreclosure inventory rate for July was at the lowest level in more than a decade.

The foreclosure inventory rate for July 2018 hit 0.5 percent, down 0.2 percent compared with the same period a year earlier, and marking a 12-year low in the statistic, according to the Loan Performance Insights Report from CoreLogic.

The July 2018 foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, remained unchanged from April, May and June of this year.

[caption id="attachment_6706" align="alignleft" width="150"] The news on foreclosures was good.[/caption]

The report shows that, nationally, 4.1 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in July 2018, representing a 0.6 percentage point decline in the overall delinquency rate compared with July 2017, when it was 4.7 percent.

Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance, CoreLogic examines the stages of delinquency and transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next. The stages include the following:

• The rate for early-stage delinquencies, or 30 to 59 days past due, was 1.9 percent in July 2018, a decline from 2.1 percent in July 2017.
• The percentage of mortgages that were 60 to 89 days past due in July 2018 was 0.6 percent, down from 0.7 percent in July 2017.
• The serious delinquency rate, or 90 days or more past due, including loans in foreclosure, was 1.6 percent in July 2018, down from 1.9 percent in July 2017. It’s the lowest for July since 2006 when it was 1.4 percent and the lowest for any month since June 2007, when it was also 1.6 percent.

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.8 percent in July 2018, down from 0.9 percent in July 2017. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent, while it peaked in November 2008 at 2 percent.

“With the national unemployment rate remaining below 4 percent since July, further declines in U.S. delinquency rates are likely in coming months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The exception will be in local areas impacted by natural hazards or a rise in unemployment. The destruction of homes and disruption to local commerce caused by natural disasters lead to a subsequent spike in local delinquency rates, even for homes that were untouched.”

While no state posted year-over-year increases in their 30-plus-day delinquency in July 2018, several metropolitan areas in Florida and Texas recorded month-over-month increases. This indicates properties in North Carolina, South Carolina and Virginia that recently experienced damage from Hurricane Florence may be at risk for early-stage delinquency. CoreLogic identified thousands of homes in these states that were affected by wind and water damage from the storm.

“We expect higher delinquency rates in the mid-Atlantic region later this year due to Hurricane Florence, which impacted almost 500,000 homes in North Carolina alone. We also see increases in serious delinquency rates in Florida and Texas reflecting the damage of Hurricanes Harvey and Irma,” said Frank Martell, president and CEO of CoreLogic. “In addition, Hawaii will likely experience an increase in delinquency rates as a result of Hurricane Lane and the eruption of Kilauea.”