by Bill McBride on 1/28/2016 03:56:00 PM
Thursday, January 28, 2016
Freddie Mac reported that the Single-Family serious delinquency rate declined in December to 1.32%, down from 1.36% in November. Freddie's rate is down from 1.88% in December 2014, and the rate in December was the lowest level since September 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 is expected to report early next 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 0.56 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).