U.S. homeowners are getting better about keeping up with their mortgage payments, driving the percentage of borrowers who have fallen behind to a three-year low, according to a new report. Still, the rate of decline remains slow, credit reporting agency TransUnion said Wednesday. The percentage of mortgages going unpaid is unlikely to return anytime soon to where it was before the housing market crashed.
About 5.49 percent of the nation's mortgage holders were behind on their payments by 60 days or more in the April-to-June period, the agency said. That's the lowest level since the first quarter of 2009.
The second-quarter delinquency rate is down from 5.82 percent in the same period last year, and below the 5.78 percent rate for the first three months of 2012.
The positive second-quarter trend coincided with an improving outlook for the U.S. housing market.
A measure of national home prices rose 2.2 percent from April to May, the second increase after seven months of flat or declining readings. Sales of new homes fell in June after reaching a two-year high in May. Sales of previously occupied homes also declined in June, but were higher than a year earlier.
Home refinancing surged in the second quarter, as interest rates sank to historic lows. And more borrowers with underwater mortgages or home loans that exceed the value of the home refinanced through the government's Home Affordable Refinance Program than ever before.
Even as housing trends turned positive earlier this year, the U.S. economy began to show signs of faltering. The national unemployment rate remained stuck at 8.2 percent, and the pace of job growth slowed sharply, with employers adding an average of only 75,000 jobs in the April-June quarter. Hiring appeared to pick up in July, however, with employers adding 163,000 jobs.
TransUnion anticipates the mortgage delinquency rate will continue to decline. But it doesn't see it falling below 5 percent this year.
The national delinquency rate remains well above its historical range, an indication many homeowners are still struggling five years after the housing downturn.
Before the housing bust, mortgage delinquencies were running at less than 2 percent nationally. It took about three years after the housing market crashed for the delinquency rate on mortgages to climb to a peak of nearly 7 percent in the fourth quarter of 2009. The rate has been trending down since then.
Home prices need to recover further for the delinquency rate to decline.
TransUnion's research is culled from its database of 27 million anonymous consumer records.
