In a study conducted by CoreLogic, a financial data and analytics firm, it was found that the proportion of US homeowners who are at least four months behind on their mortgage payments has reached 1.4%, a 21-year record high.
This figure is up 0.12% from July 2019, and is the highest level that has ever been attained since CoreLogic began tracking such activities in 1999. These figures are including people who declared forbearance because of the CARES Act.
Dr. Frank Nothaft, the chief economist at CoreLogic, had this to say regarding his firm’s latest findings: “What we’re seeing is a ‘pig in python’ effect with a spike in June for 90-day delinquencies and now in July with 120-day delinquencies.”
Nothaft went on to say that if the delinquency rate remains on its current path, at least 2 million loans will be classified as seriously delinquent by the end of 2021.
Rhea Thomas, a senior economist at the financial firm Wilmington Trust, believes that stimulus payments from the US government play a key role in combating this threat.
Thomas explained: “While elevated savings may help households meet their payment obligations in the near term, additional fiscal stimulus will likely be needed to help households to bridge the gap until the labor market fully recovers.”
