In Q2 2016, the serious mortgage delinquency rate (60 or more days past due) declined to 2.30%, down more than 18% from 2.82% in Q2 2015, according to TransUnion’s Industry Insights Report, powered by PramaSM analytics.
Mortgage originations, viewed one quarter in arrears (to ensure all accounts are reported and included in the data), modestly dropped from 1.48 million in Q1 2015 to 1.46 million in Q1 2016. The decline snapped a five-quarter streak of continuous year-over-year growth.
The mortgage sector continues to perform well, and we expect originations to be more robust when the full Q2 numbers become available. This is mostly due to the unusually low interest rates available as a result of Brexit and other macroeconomic factors. While the mortgage sector performs well, we continue to pay special attention to states impacted by the energy crisis. States with economies heavily reliant on oil and energy are bucking the trend and experiencing higher delinquency rates.
TransUnion data show that only three states—North Dakota (+10.8%), Wyoming (+9.6%) and West Virginia (+0.5%)—experienced yearly delinquency increases.
Average mortgage debt per borrower continued to grow, rising 2.3% in the last year to $192,749. This marked the 5th consecutive quarter of mortgage debt growth and is largely due to the overall increase in home prices. The Case-Schiller Home Price Index rose from 178.92 to 188.29 within the last year (May 2015 to May 2016).
Trends in the Mortgage Market
|Mortgage Lending Metric||Q2 2016||Q2 2015||Q2 2014||Q2 2013|
|Delinquency Rate (60+ DPD) per Borrower||2.30%||2.82%||4.02%||4.35%|
|Average Debt Per Borrower||$192,749||$188,504||$187,999||$185,687|
|Prior Quarter Originations*||1.46 million||1.48 million||1.03 million||2.04 million|
*Note: Originations are viewed one quarter in arrears to account for reporting lag.