by Bill McBride on 5/21/2010 01:07:00 PM
Friday, May 21, 2010
Here is a scatter graph comparing the Q1 2010 delinquency rate for mortgage loans (including all loans in foreclosure) vs. the April unemployment rate for all states.
Click on graph for larger image in new window.
There definitely is a relationship between delinquency rates and the unemployment rate, although a couple of states really stand out; Florida and Nevada. Florida has a high number of delinquencies because of state specific foreclosure laws - it takes forever to foreclose.
The delinquency rate in Nevada is also very high, probably because of the large percentage of homeowners with negative equity. Both states might also have higher than expected delinquency rates because of significant investor activity during the housing bubble.
This does suggest that a large part of the delinquency problem is related to unemployment.
Note: Sorry I couldn't label all the states. Here are graphs by state for unemployment rates and mortgage delinquency rates.