In February, Freddie Mac stated that the serious delinquency rate for Single-Family homes was 0.65%, a decrease from 0.66% in January. This rate is also lower than the previous year’s 0.99% in February 2022.
Freddie Mac’s serious delinquency rate had peaked at 4.20% in February 2010 after the housing bubble, and reached 3.17% in August 2020 during the pandemic.
The delinquency category includes mortgage loans that are “three monthly payments or more past due or in foreclosure”. However, mortgages in forbearance are included in this report as delinquent but are not shared with the credit bureaus.
Furthermore, the serious delinquency rate was at 0.60% just before the pandemic, indicating that it has nearly returned to that level.
It is essential to note that while single-family delinquencies have been decreasing, multi-family delinquencies have been increasing. In February, multi-family delinquencies were at 0.13%, up from 0.08% in February 2022.
The Single-Family serious delinquency rate is an important indicator of the health of the housing market. A low delinquency rate indicates that homeowners are able to make their mortgage payments on time, which is a positive sign for the economy as a whole. Conversely, a high delinquency rate can indicate that homeowners are struggling to make their payments, which could lead to foreclosures and a decline in the housing market.
The fact that Freddie Mac’s serious delinquency rate has continued to decline is a positive sign for the housing market. The rate has been steadily declining since its peak in February 2010, which is a reflection of the economic recovery that has taken place since the Great Recession.
It’s worth noting that the serious delinquency rate is only one of many indicators of the health of the housing market. Other factors, such as housing prices, inventory levels, and new construction, all play a role in determining the overall health of the market.
Freddie Mac’s continued decline in the Single-Family serious delinquency rate is a positive sign for the housing market. It indicates that homeowners are able to make their mortgage payments on time, which is a sign of economic stability. However, it’s important to continue to monitor other indicators of the housing market to ensure that the recovery is sustainable over the long term.