New York, NY, June 19, 2006--Late payments and new foreclosures on U.S. homes declined in the first quarter of 2006 compared with the last quarter of 2006, reflecting an improving economy and job creation, the Mortgage Bankers Association said on Monday.
The mortgage delinquency rate fell to 4.41 percent in the first quarter from 4.70 percent the prior quarter, though it was up from 4.31 percent in the first quarter of last year, the MBA said in its quarterly National Delinquency Survey.
New foreclosures on homes, the percentage of loans that entering the foreclosure process, declined to 0.41 percent from 0.42 percent both in the fourth quarter and a year earlier.
These figures are seasonally adjusted.
Delinquency rates would have been even lower in the first quarter without the effects of Hurricane Katrina, although the impact is slowly diminishing, the survey found.
A 5.3 percent rate of economic growth and an average 176,000 monthly job gain in the first quarter offset rising interest rates and energy costs that typically boost late payments and foreclosures on homes, MBA chief economist Doug Duncan said.
However, a slowing housing market, more interest rate hikes by the Federal Reserve at a time when a growing share of homeowners have adjustable-rate loans and cooling economic growth could boost delinquencies and foreclosures, he said on a conference call.
