A Mortgage Bankers Association report shows 8% of mortgage borrowers were at least one month past due on their payments during the third quarter down from 8.4% in the second quarter and 9.1% one year ago.
The decline means the housing market woes aren't getting worse, but many markets must still digest an enormous backlog of bank owned foreclosures over the coming years. It's likely to keep pressure on prices for at least another year and the market remains vulnerable if the economic recovery doesn't accelerate.
The housing market has moved largely in lockstep with employment. As job growth firms up, delinquencies should continue to fall, but if borrowers lose their jobs or see their hours cut back they are more likely to fall behind on payments.
Experts say it could take at least three four years for foreclosure levels to return to more normal levels. The housing market still faces other big challenges, such as the nearly one in four homeowners with a mortgage who owe more than their homes are worth.
Florida appears to be in the worst shape for foreclosures. In the judicial-foreclosure state, more than 14% of all mortgages were in some stage of foreclosure at the end of September, the highest rate in the country.
Information Provided by: The Wall Street Journal, November 18, 2011