Alabama Sees Decrease in Mortgage Delinquency and Foreclosure

Two words that create uneasiness in real estate owners: delinquency and foreclosure. Delinquency and foreclosure go hand-in-hand, with delinquency being failure to make required payments and foreclosure being the process of taking possession of the property for failed payments. The rates of delinquent payments and foreclosures are significantly impacted by the current state of the market. The good news that I am sharing today: delinquency and foreclosure rates in Alabama and across the U.S. decreased in the first quarter of this year.

Through March 2018, Alabama’s percentage of payments 30 plus days delinquent and 90 plus days delinquent saw a decrease. Year-over-year changes from 2017 to 2018 saw 30 plus days delinquent payments decrease from 6 percent to 5.7 percent, while 90 plus days delinquent payments decreased .4 percent, from 2.6 to 2.2 percent. Similarly, the foreclosure rate decreased .1 percent, from .5 to .4 percent. Several of the metro areas in the state saw decreases in foreclosure rates, such as: Tuscaloosa, Birmingham, and Auburn-Opelika which all saw a .1 percent decrease in their foreclosure rates. Mobile and Gadsden saw the largest decreases, with their respective rates declining by .2 percent. Notwithstanding, Huntsville and Baldwin County’s foreclosure rates remained constant. The full state statistics by CoreLogic can be viewed here.

The United States as a whole also saw significant decreases in foreclosure rates. The United States foreclosure rate decreased .2 percent, dropping to .6 percent. Moreover, FHA delinquency rate declined by 136 basis points (-1.36 percent) over the previous quarter, which is the largest single-quarter decline reported for the National Delinquency Survey data series, put out by the Mortgage Bankers Association. The conventional and VA delinquency rates declined by 41 basis points and 17 basis points respectively from the previous quarter.

What do all these statistics mean? The data shows that the main reason for the decline in these rates is a higher employment rate and increased wages. Alabama has definitely been positively impacted by the economic upswing, as not only foreclosures decreased, but overall sales increased 8 percent and price went up 11 percent this past year. Moreover, household income in the state has increased 8.5 percent over the past year. This considerable gain is due to the arrival of big companies to Alabama, such as: Toyota-Mazda, Google, and Facebook. Furthermore, Walmart announced the addition of a new $135 million dollar distribution center opening this August, along with a multi-million dollar campaign to remodel seven sites in the state. Lastly, Huntsville has become one of the top places in the U.S. for startup businesses. With more companies expected to be on the way, Alabama is truly open for business in all different facets.

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