A recent study by the S&P Dow Jones Indices and Experian has shown a decline in three of the four Consumer Credit Default indices. The first mortgage default rate decreased two basis points to 0.26%, while the bank card default was down 18 basis points to 2.83%. The auto loan default rate fell only 4 basis points to 0.30%.
Three out of the five large metropolitan areas nationwide saw lower default rates this month. Los Angeles had the largest decrease; falling by 5 basis points to 0.37%. New York and Chicago saw a decrease of 3 each; New York’s rate went from 0.46% down to 0.43%, and Chicago’s decreased from 0.41% down to 0.38%. Dallas was unchanged at 0.42%, while Miami increased to one basis point from 0.82%.
Attom and RealtyTrac’s Midyear 2021 U.S. Foreclosure Market Report reports 65,082 foreclosure filings for residential properties nationwide from January to June of this year; a 61% decrease from the same period in 2019 and down 78% since last year.
Rick Sharga, an executive vice president of RealtyTrac, said “With the moratorium scheduled to end on July 31, and half of the remaining borrowers in forbearance scheduled to exit that program over the next six months, we should start to get a more accurate read on the level of financial distress the pandemic has caused for homeowners across the country.”
Possible Turnaround
The US economy has seen a remarkable turnaround since the pandemic, despite this year’s first-half economic contraction of 1 percent on an annualized basis; it was still able to add 850,000 jobs in June. Jobless figures have also improved for the country as last week concluded with a 26,000 decrease in initial unemployment claims.
A rebound in the economy has allowed many American homeowners to regain the financial stability they had before the financial crisis; with just 1.75 million homeowners currently in forbearance plans, reports Mortgage Bankers Association. The number of borrowers in forbearance has dropped for the twentieth consecutive week, with 3.50% of servicers’ loan funds now in forbearance. This is a decrease from the prior week’s 3.76%. The total amount of loans in forbearance dropped 26 basis points this past week.
The Pandemic has been a difficult time for American homeowners, but the US is on its way to economic recovery and most mortgage default rates are dropping nationwide. It’s important that you keep your finances in check during these uncertain times so that you can plan ahead and avoid foreclosure if at all possible. If there are any concerns about how well your housing financial situation will fare over the next few years, contact our experts today! We’re happy to assess what steps need to be taken now or later down the line so that we can help ensure a bright future with minimal risk of debt accumulation – just call us at 1-866-857-5405!
