Early signs are emerging that the pandemic and recession are affecting the home mortgage market.
The share of U.S. homeowners who fell behind on their mortgage payments rose in March by the largest share in seven years, according to a new report by CoreLogic.
But mortgage delinquency and home foreclosure rates in March remained near record lows nationwide, CoreLogic said.
"The COVID-19 pandemic has shocked our economic system and led to unprecedented job loss, reducing the ability of affected families to make their monthly mortgage payments," Dr. Frank Nothaft, chief economist at CoreLogic, said in the report. "The latest forecast from the CoreLogic Home Price Index shows prices declining in 41 states through April 2021, potentially erasing home equity and increasing foreclosure risk."
Foreclosures are near 20-year lows. Nationwide, 0.4% of home mortgages were in foreclosure in March.
CoreLogic said that 3.7% of Dallas-Fort Worth homeowners with loans had missed at least one mortgage payment in March _ the same as in December and slightly less than in March 2019. Only 1.2% of D-FW mortgages were "seriously delinquent."
Looking at major Texas metros, Houston had the largest percentage of home loans with late payments at 4.9%. And in Austin, only 2.4% of homeowners had missed at least one payment.
During the worst of the recession in 2010, more than 5% of Dallas-area mortgages were seriously delinquent and about 1.5% of D-FW loans were in foreclosure.
Most housing analysts anticipate that home loan delinquencies and foreclosure rates will rise later this year.
Almost 5 million Americans have taken loan payment forbearance because of the pandemic. Those loans are not counted as delinquent.
And with more than 40 million people nationwide now collecting unemployment, it's expected to be felt in the housing market.
In May, North Texas preowned home sales fell by 25% _ the largest such year-over-year decline in almost a decade.
Median home sales prices in the area fell by 1% in May from a year earlier.
"The build-up in home equity over the past several years, government stimulus programs and lower borrowing costs have helped cushion homeowners from the initial financial shock of the pandemic and kept widespread delinquencies at bay during the first months of the recession," said Frank Martell, president and CEO of CoreLogic. "Looking ahead, we can expect a more widespread impact on U.S. delinquency rates as the economic toll of elevated unemployment and shelter-in-place orders becomes more evident."
