The single family home serious delinquency rate fell to 0.54% in July 2023, the lowest level since 2002.
This is good news for homeowners, as it indicates the resilience of the housing market and that there is currently a low risk of foreclosures.
The single-family ‘serious delinquency rate’ is a crucial metric that measures the percentage of mortgages in serious delinquency, usually defined as loans that are 90 days or more past due or in other words, a mortgage is considered to be in serious delinquency when the borrower has not made a payment for three months. This metric serves as a barometer of the overall health of the housing market and provides insights into the financial well-being of homeowners. A low serious delinquency rate typically indicates a robust housing market and economic stability.
* Board of Governors of the Federal Reserve System (US), Delinquency Rate on Single-Family Residential Mortgages, Booked in Domestic Offices, All Commercial Banks [DRSFRMACBS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/DRSFRMACBS, August 28, 2023.
There are a few factors that have contributed to the decline in the serious delinquency rate. First, despite rising mortgage rates and a battle with inflation the economy has remained fairly resilient. Additionally, the unemployment rate is near historic lows while job growth remains steady. This means that most homeowners are able to make their mortgage payments. Finally, many Americans amassed a store of extra savings over the pandemic years that may have helped them weather any financial emergencies that have come their way in recent times, better than in years past.
The low serious delinquency rate is good news for most homeowners, however there are some signs that delinquencies may be rising on other forms of consumer credit such as credit cards and auto loans Some experts are concerned that if these delinquencies continue to rise, it may eventually spill over into the housing market.
If you find yourself struggling to make your monthly mortgage payment now or in the future, it’s important to know what you should and shouldn’t do. Below are some tips to help you navigate the process.
What Homeowners Can Do If They Are Having Trouble Making Their Mortgage Payment
If you are struggling to make your mortgage payment, here are some things you should do:
Contact your mortgage lender as soon as possible. Don't wait until you're behind on your payments to reach out. Your lender may be able to work with you to create a payment plan or modify your loan terms.
Ask for a forbearance. A forbearance is a temporary period of time during which you don't have to make your mortgage payments. This can be a good option if you know that your financial hardship is temporary.
Get a mortgage modification. A mortgage modification changes the terms of your loan, such as the interest rate or monthly payment amount. This can make your loan more affordable if you're struggling to make your payments.
Refinance your mortgage. If you have equity in your home, you may be able to refinance your mortgage to a lower interest rate. This can lower your monthly payment and make it easier to afford your mortgage.
Sell your home. If you're unable to make your mortgage payments, you may need to sell your home. This can be a difficult decision, but it may be the best option for you if you can't afford to keep your home. Even if you aren't sure this is the route you want to go, the sooner you contact a Realtor, the more options you may have. Reach out to us a 812Living@gmail.com to discuss the options available for you.
Additionally, here are some resources available that may be able to help you avoid foreclosure:
The Consumer Financial Protection Bureau (CFPB) offers information and resources for homeowners who are struggling to make their mortgage payments. You can find more information on the CFPB website: https://www.consumerfinance.gov/
The National Foundation for Credit Counseling (NFCC) is a nonprofit organization that provides free credit counseling and debt management services. You can contact the NFCC at 1-800-388-2227 or visit their website: https://www.nfcc.org/
The Homeownership Preservation Foundation (HOPE) provides counseling and assistance to homeowners who are facing foreclosure. You can contact HOPE at 1-888-995-HOPE (4673) or visit their website: https://www.hopenow.org/
For now, the news seems to be positive for homeowners and we hope that the economy stays strong for years to come. In the event that circumstances change for the market, or for you personally, we want you to be prepared to take the best action for you and your family.
At the 812 Living Group, we have more than a decade of experience selling real estate in both good and bad economic times. Additionally, we work with a group of investors who may be able to provide creative options for you and your home if you ever find yourself in a foreclosure situation. If you need help with selling or buying real estate, contact us at 812Living@gmail.com for a free consultation.
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