by Bill McBride on 12/28/2015 03:05:00 PM
Monday, December 28, 2015
Freddie Mac reported that the Single-Family serious delinquency rate declined in November to 1.36%, down from 1.38% in October. Freddie's rate is down from 1.91% in November 2014, and the rate in November was the lowest level since October 2008.
Freddie's serious delinquency rate peaked in February 2010 at 4.20%.
Fannie Mae reported today that the Single-Family Serious Delinquency rate was unchanged in November at 1.58%. The serious delinquency rate is down from 1.91% in November 2014.
The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.
These are mortgage loans that are "three monthly payments or more past due or in foreclosure".
Click on graph for larger image
Although the rate is declining, the "normal" serious delinquency rate is under 1%.
The Freddie Mac serious delinquency rate has fallen 0.55 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.
The Fannie Mae serious delinquency rate has only fallen 0.33 percentage points over the last year - the pace of improvement has slowed - and at that pace the serious delinquency rate will not be below 1% until 2017.
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).