May 09, 2013Delinquency rate rises, but inventory eases in Q1: MBA.
The delinquency rate on U.S. home mortgages rose in the first quarter as more homeowners fell behind on payments for the first time, data from an industry group showed today. The seasonally adjusted delinquency rate on all loans rose to 7.25 percent from 7.09 percent in the first quarter, but was down from 7.40 percent a year ago, according to a report from the Mortgage Bankers Association. The number of loans that were 30 days late on payments rose to 3.21 percent from 3.04 percent at the end of last year. Mortgages that were 90 days or more past due, which are considered less likely to get back on track, edged down to 2.88 percent from 2.89 percent.
Six years after its far-reaching collapse, the housing market started to turn the corner last year with prices rising, inventory tightening and low interest rates enticing some buyers. “On the delinquency side, it’s a small increase but we’re back to pre-crisis levels. That number is just going to track what’s happening in the job market,” said Michael Fratantoni, MBA’s vice-president of research and economics. Delinquency rates include mortgages that are at least one payment behind but have not yet entered the foreclosure process. Foreclosure inventory fell to 3.55 percent from 3.74 percent, while the number of loans starting the process held steady at 0.70 percent, the lowest level since the second quarter of 2007. Among the different types of loans, subprime fixed and adjustable rate mortgages saw the largest increases in delinquencies, though there were fewer subprime loans sitting in the foreclosure process. The two categories make up more than 10 percent of overall mortgages, MBA said.
Jobless claims fall to lowest level in almost five-and-half years.
The number of Americans filing new claims for unemployment benefits dropped to its lowest level in nearly 5-1/2 years last week, signaling labor market resilience in the face of fiscal austerity. Initial claims for state unemployment benefits fell 4,000 to a seasonally adjusted 323,000, the lowest level since January 2008, the Labor Department said today. Claims for the prior week were revised to show 3,000 more applications received than previously reported. Economists polled had expected first-time applications to rise to 335,000 last week. The third straight weekly decline in claims pushed them further below the 350,000 mark, which economists normally associate with a firming labor market. Claims are showing no sign of a pick-up in layoffs even as other parts of the economy such as manufacturing start to show strain from tighter fiscal policy.
A Labor Department analyst said no states had been estimated and there was nothing unusual in the state-level data. The four-week moving average for new claims, a better gauge of job market trends, dropped 6,250 to 336,750 – the lowest level since November 2007. Coming on the heels of data last week showing surprising strength in the labor market, the claims report could further assuage fears of an abrupt slowdown in the economy. Employers added 165,000 new jobs to their payrolls in April and hiring in the previous two months was stronger than initially reported. The unemployment rate dropped to a four-year low of 7.5 percent. The improvement in employment contrasts sharply with other data, including retail sales and manufacturing, that have suggested a cooling in the economy at the end of the first quarter, which persisted early in the April-June period. The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid dropped 27,000 to 3.0 million in the week ended April 27. That was the lowest level in so-called continuing claims since May 2008.
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