Thursday, October 25, 2018

Freddie Mac: Mortgage Serious Delinquency Rate Unchanged in September

by Bill McBride on 10/25/2018 07:46:00 PM

Friday:
• At 8:30 AM ET, Gross Domestic Product, 3nd quarter 2018 (Advance estimate). The consensus is that real GDP increased 3.3% annualized in Q3, down from 4.2% in Q2.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for October). The consensus is for a reading of 99.0.

Freddie Mac reported that the Single-Family serious delinquency rate in September was 0.73%, unchanged from 0.73% in August. Freddie's rate is down from 0.86% in September 2017.

Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

This ties the lowest serious delinquency rate for Freddie Mac since January 2008.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure". 

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

The increase in the delinquency rate late last year was due to the hurricanes (These are serious delinquencies, so it took three months late to be counted).  We will probably see another, smaller, bump following hurricanes Florence and Michael.

I expect the delinquency rate to decline to a cycle bottom in the 0.5% to 0.7% range - but this is close to a bottom.

Note: Fannie Mae will report for September soon.