Pandemic Forcing More To Fall Behind On Mortgage Payments
After 27 months of continual decline, the number of Americans falling behind on their mortgage payments is on the rise.
In April alone, 6.1% of borrowers across the United States were at least 30 days late on their payments. That’s according to an analysis from global property data firm, CoreLogic.
“In my mind, that’s clearly the effect of the pandemic and of the disruption to everyone’s livelihood,” said CoreLogic’s chief economist, Frank Nothaft.
According to the report, the hardest hit areas were the early COVID-19 hotspots like New York and New Jersey. But, it’s happening in the Mountain West, too.
“One of the biggest jumps was also in the state of Nevada. And Nevada in particular when you look at Las Vegas, you look at Reno, those are two cities that are very dependent on travel from outside of the state,” said Nothaft.
In April, 7.4% of borrowers in Nevada were behind on their mortgage payments by a month or more. At the same time last year, it was 1.1%. And, 5.5% of borrowers in New Mexico are behind by a month or more.
Additionally, the analysis stated the national rate of people who transitioned from current to delinquent is now higher than it was at the height of the Great Recession.
“The share of mortgages that transitioned from current to 30-days past due was 3.4% in April 2020, up from 0.7% in April 2019. This marks the highest transition rate since at least January 1999. In January 2007, just before the start of the financial crisis, the current- to 30-day transition rate was 1.2%, while it peaked in November 2008 at 2%,” the report stated.
Nothaft said delinquencies — and ultimately foreclosures — will likely rise, as long as the economic downturn from the pandemic continues.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
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