#MORTGAGE DEFAULTS RISE PLUS#

The indirect impact of more Fed rate hikes this year portends further increases to the average 30-year, fixed-rate mortgage-which has been stuck above 6.5% since May, and nearly hit 7% in early August.įederal Reserve Chair Jerome Powell acknowledged that the Fed’s tightening policies have hampered the housing market. The new projection implies one more rate hike before the end of 2023 if the Fed proceeds with quarter-point increases. In June, the Fed revised the 2023 peak rate projection up to 5.6% from the 5.1% target policymakers projected in March. With this latest increase, the federal funds rate sits at a 22-year high. The Fed’s rapidly-paced rate hikes began in March 2022-when borrowing rates were nearly zero-until voting to pause in June after 10 consecutive increases. To determine monetary policy, the Fed will continue to consider “a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” according to a press statement.Īt their July meeting, Fed officials lifted the central bank’s benchmark federal funds rate-the borrowing rate for commercial banks and credit unions-by 25 basis points to a 5.25% to 5.5% range. Though the July 2023 inflation reading stands at 3.2%-after spiking to 8.5% in July 2022-the rate remains above the Fed’s 2% target. Rates for home loans remain caught in the ongoing battle between still-high inflation and the Federal Reserve’s campaign to rein it in, which has played a role in driving long-term mortgage rates higher, consequently hampering the housing market. This, along with affordability and limited housing inventory, is driving up prices.Mortgages Can’t Catch a Break as Fed Raises Rates Again and Signals More Tightening Mortgage prepayment activity – a measure of overall economic health – fell to 0.44 percent, indicating a slowdown in the housing market.Īt the same time, the report highlighted a surge in home prices in the eastern half of the United States last month, with Miami experiencing the highest monthly increase nationwide at 0.63%.

The local real estate market, however, seems to be under strain from high rates and low inventory, affecting the spring homebuying season.

This brought the rate of delinquent mortgages down to just 3.83 percent of all mortgages in Florida. Despite this, the state saw a significant decline of more than 15% in delinquency rates from February, marking the second-largest reduction in the past 17 years. The state, lagging behind most others, ranked 48th in terms of improvement over the last 12 months, according to a data published in April 2023. In addition, the percentage of foreclosure actions initiated on serious delinquencies in April remained more than four percentage points below the monthly average before the pandemic.įlorida’s situation reflects the broader national trend, but with some distinct features. This figure stands 45 percent below the pre-pandemic level of April 2019. April saw a 23% decrease in foreclosure starts to 25,000 for the month – the lowest since September 2022. Meanwhile there was good news on the foreclosure front.

#MORTGAGE DEFAULTS RISE PLUS#

In 45 states, accounting for 90% of the nation, plus the District of Columbia, the number of such loans saw a reduction. This led to an increase by 200,000 (+25%), which aligns with the impacts of previous similar calendar-related events.ĭespite this rise in early-stage delinquencies, the report showed significant improvement in serious delinquencies, defined as loans 90 or more days past due. However, the end of April falling on a Sunday impacted the processing of payments made on the last calendar day, which helped worsen the rise in early-stage delinquencies (borrowers 30 days late). While this indicates a notable month-over-month increase, the figure also represents a 2.11 percent rise year-over-year.

Foreclosure starts reach the lowest level since September 2022, signaling positive trends in the housing market.Īccording to a new report released by Jacksonville-based Black Knight, Inc., a mortgage data and analytics company, the national mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) rose by 13 percent in April.

Florida experienced a significant reduction in delinquency rates despite a strained real estate market.

The national mortgage delinquency rate rose in April, but serious delinquencies and foreclosure data showed improvement.

Mortgage defaults rise