Arizona Real Estate Experiences A Significant Drop in Mortgage Delinquency Rates
According to some reports, some American citizen fails to meet their mortgage amortizations on time. This is a very good indicator that US economy is now improving. Aside from being a good indicator of an improving economy, the drop in first time default rate can also be attributed to an increasing home costs, tighter lending standard, and decreasing unemployment rate which all added to overall progress in mortgage quality.
Reports said that mortgages with atleast 30 days overdue also drop to 5 million in March from 7.7 million in January of 2010. Even so it is still on a higher rate compared to 2.2 million non- current mortgages recorded in January 2006 in which the US housing market is at its peak.
Arizona has the biggest progress in mortgage delinquencies for the previous years. This indicates that Arizona housing market is really recovering and that Arizonian consumers are now showing improvements in paying their debts.
According to TransUnion (credit- bureau) the actual percentage of mortgages with 60 days or more overdue, drops from 6.86 % during the first quarter of 2012 to 4.26% in the first quarter of 2013. The delinquency rate significantly drops to 37.9% which became the country’s best followed by California with 36.6% drop, and Colorado with 28.5% progress. The 50 states including the Columbia saw that their mortgage delinquency rate improves over the previous years.
“The national mortgage-delinquency rate experienced its first major decline since the advent of the housing crisis”. “We certainly expected improvement this quarter, as the housing sector is in recovery, but the magnitude of the improvement was unexpected.” according to Tim Martin (TransUnion vice president on financial services business unit).
The recent mortgage delinquency of the state of Arizona sets down the 4.56% national average which moved from 5.78% the previous year. The credit- bureau (TransUnion) expects that this mortgage delinquency rate will continue its downward trend finishing close to 4.5%.
“The housing sector as a whole has definitely been improving with prices up, negative equity down and (interest) rates staying low,” said Tim Martin. “That seems to have helped borrowers this quarter, some of whom have been delinquent for a rather long time, work their way out of the system at a faster pace.”
In a different measure, Nevada shows the biggest drop in housing debts over the previous year, dropping almost 5% to an average of $204,663. The 3.9% drop to $188, 690 was also the second biggest drop from the state of Arizona. California on the other hand in on the third rank with a drop of 3.2% to $320, 419.
Florida has the highest proportion of mortgage delinquency at 11% followed by the state of Nevada at 9.12% and New Jersey at 6.93%. Nebraska, South Dakota, and North Dakota recently have the lowest past- due rate of below 2%.
“We do not know if the first quarter was a blip or if it’s the beginning of a more rapid decline.” said Tim Martin.
The study made by TransUnion is actually a part of a continuing series of quarterly reviews on how U.S. consumers manage their credit cards, auto loans, and mortgages.
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