July’s housing market numbers show the market is cooling. If your clients are solely reading headlines, they may be asking you if the market is going to crash. 

There are several reasons today’s market differs from the 2007-2008 market, including mortgage data surrounding foreclosure starts and delinquency rates. 

Black Knight’s July 2022 Mortgage Data

While the first half of 2022 saw some increases in foreclosure activity compared to historically low levels in 2021, foreclosure rates remain below pre-pandemic levels. 

kcm-first-half-foreclosure-activity-by-year

Black Knight, Inc. continues to analyze monthly mortgage data. Here are key findings from its “first look” at July 2022 month-end mortgage performance statistics. 

  • The national delinquency rate increased slightly to 2.89% in July. This was driven by a 4% increase in early-stage delinquencies and remains just 14 basis points higher than the record low set in May of this year.
  • Serious delinquencies are loans 90 or more days past due but not yet in active foreclosure. These pulled back in July after worsening for the first time in 22 months in June.
  • The number of seriously delinquent loans curing to current has dropped steadily over recent months, from 104K in March to 58K in July, indicating that the easiest workouts have likely been completed.
  • Foreclosure starts retreated 25% from June for a total of 17.7K starts in July. This is about 55% below pre-pandemic levels – equating to just 3% of 90+ day past-due loans.
  • Though still up from record lows from widespread moratoriums and forbearance protections last year, the number of loans in active foreclosure declined slightly by 6K in July.
  • Prepayment activity dropped by another 18% in July and is now down by 67% from last year as rising rates put downward pressure on both purchase and refinance lending.

Overall, mortgage performance remains strong, as it has throughout the pandemic. Many homeowners took advantage of refinancing to historically low mortgage rates. Coupled with increased equity, this puts homeowners in a secure position financially. 

A more in-depth data analysis will be provided in Black Knight’s monthly Mortgage Monitor report, available September 7.