Mortgage Delinquencies Declining

According to a recent Wall Street Journal article, there has been a decline in mortgage delinquencies as a result of an improving labor market.

The job market effects the mortgage market intensely, because, as the article points out, “people need a paycheck to pay their mortgage.”

During the fourth quarter, the number of people behind on mortgage payments fell to its lowest point in two years. 

An important takeaway from this article: “The figures provide the clearest indication yet that the mortgage crisis that began four years ago has stopped getting worse and is easing.”

Another thing to note is that the state of California is doing extremely well compared to others, with the state’s total foreclosure inventory in the fourth quarter below the national average for the first time since the mortgage crisis began.

An economist said that without a spike in unemployment, the mortgage delinquency rate should continue to decline; a great sign for economic recovery.

Mortgage Rates Ease

This past week, mortgage rates have declined “as fears about the economic impacts of turmoil in the Middle East helped depress yields on long-term bonds, including those that fund most home loans,” according to Inman News and a survey by Freddie Mac.

The Wall Street Journal reported that the 30-year fixed-rate mortgage averaged 4.95%, down from last week’s 5% and 5.05% a year before.
Rates on 15-year fixed-rate mortgages were 4.22%, below last week’s 4.27% and the year-earlier average of 4.4%, as well.

After a spike in rates that hadn’t been so high since last April, this is  promising for a downward trend in mortgage rates despite mixed overall economic reports.