by Bill McBride on 9/28/2015 12:55:00 PM
Monday, September 28, 2015
Freddie Mac reported that the Single-Family serious delinquency rate declined in August to 1.45%, down from 1.48% in July. Freddie's rate is down from 1.98% in August 2014, and the rate in August was the lowest level since October 2008.
Freddie's serious delinquency rate peaked in February 2010 at 4.20%.
These are mortgage loans that are "three monthly payments or more past due or in foreclosure".
Note: Fannie Mae will report their Single-Family Serious Delinquency rate for August later this week.
Click on graph for larger image
Although the rate is declining, the "normal" serious delinquency rate is under 1%.
The serious delinquency rate has fallen 0.53 percentage points over the last year, and at that rate of improvement, the serious delinquency rate will not be below 1% until the second half of 2016.
So even though delinquencies and distressed sales are declining, I expect an above normal level of Fannie and Freddie distressed sales through 2016 (mostly in judicial foreclosure states).