“With storms and wildfires currently impacting multiple areas of the country, homeowners, lenders, and servicers should remain vigilant of potential impacts.” — Frank Martell, CEO of CoreLogic
Most of the U.S. experienced significant declines in serious mortgage delinquency rates this summer.
A serious delinquency — one that extends more than 90 days — is a sign of significant distress on the part of the homeowner and, as such, is a strong indicator for the health of a local housing market.
June of 2018 had the lowest serious mortgage delinquency rates in the U.S. since 2011, however, there were two notable exceptions. Florida and Texas — both of which were hit by major hurricanes in 2017— were the only states to post annual gains in serious delinquency rates.
“Delinquency rates in areas hit by wildfires, hurricanes, or other natural disasters have jumped as families deal with financial disruption and tragedy,” said Frank Nothaft, CoreLogic chief economist. “The loss of housing and displacement of families also tends to drive up local rents and reduce vacancies.”
How Hurricane Florence Could Increase Foreclosures in the Southeast
Forecasts have shown that Hurricane Florence could drop more than two feet of water on North and South Carolina. Those predictions have fueled speculation that the storm might affect parts of the southeast similar to the havoc wreaked on Texas and Florida in 2017 by Hurricanes Harvey and Irma.
“The risk to mortgages in the months following a natural hazard can be substantial,” said Nothaft.
Serious delinquency rates in Houston, Texas, and Cape Coral, Florida, tripled after Hurricanes Harvey and Irma and federally mandated foreclosure moratoria expired, according to CoreLogic researchers.
“Neighborhoods impacted by similar disasters in 2018 should also expect to see a spike in delinquencies in the coming year,” said Frank Martell, president and CEO of CoreLogic. “With storms and wildfires currently impacting multiple areas of the country, homeowners, lenders, and servicers should remain vigilant of potential impacts.”
Homeowners in California and Hawaii as well as in Rocky Mountain and Gulf Coast states should be particularly vigilant, Martell added.
Nothaft urged moderation rather than panic, noting that low levels of unemployment were “enabling more homeowners to remain current on their mortgages.” Corresponding unemployment numbers for June 2018 — the same month measured in the latest CoreLogic report — were reported as 4 percent, which is “the lowest for June in 18 years,” he added.