Economy Watch: Mortgage Delinquencies Edge Up, Foreclosures Down
- Oct 07, 2014
Black Knight Financial Services reported in its latest Mortgage Monitor on Monday that 5.9 percent of U.S. mortgages were delinquent in August, up from 5.64 percent in July. The company also reported that 1.8 percent of mortgages were in the foreclosure process in August, down from 2.66 percent in during the same month in 2013. According to Black Knight, delinquency begins at more than 30 days late.
All together, 7.7 percent of mortgages were delinquent or in foreclosure by the company’s calculation. Black Knight broke the data down as follows: 1,852,000 properties are 30 or more days, but fewer than 90 days, past due; 1,143,000 properties are 90 or more days delinquent, but not in foreclosure; and 913,000 loans in the foreclosure process.
Newer loans tend to be in better shape. “We looked again at mortgage performance and found delinquencies in 2012-2014 vintage loans lower than any of the prior seven years,” Kostya Gradushy, Black Knight’s manager of Research and Analytics, notes. “In fact, even among borrowers with lower credit scores, these vintages are outperforming all previous vintages. This holds true for FHA mortgages as well, where we found that early-stage delinquencies were lower than in all pre-2012 vintages.”
Gallup reports consumer spending drops in September
Americans’ daily spending dropped to an average of $87 in September, down from $94 in July and August, according to Gallup on Monday. However, spending in September this year was slightly higher than the $84 average for September last year.
The drop in spending Gallup found in September isn’t unusual. Since 2010, spending has dropped each year between August and September, although the size of the drop has varied. The consistent declines may be the result of increased spending in August, thanks to back-to-school purchases and summer vacations.
September’s $7 drop in average spending is comparable with past August-to-September drops. Last year, for instance, the drop was $11. Monthly averages in self-reported spending so far in 2014 have mostly exceeded average spending for the corresponding month in 2013, and especially so for 2009 to 2012, when averages were in the $60 to $70 range. Still, this year’s monthly averages are still lower than the nearly $100 averages seen in 2008.
The findings are based on Gallup interviews with more than 14,000 Americans throughout September. The poll asks Americans to report the total amount they spent “yesterday” in stores, gas stations, restaurants, or online—not counting home and vehicle purchases, or normal monthly bills—and gives an indication of their discretionary spending.
Wall Street ended the day down on Monday, with the Dow Jones Industrial Average losing 17.78 points, or 0.1 percent. The S&P 500 declined 0.16 percent and the Nasdaq was off 0.47 percent.