Mortgage delinquency rates hit an all-time high in the first quarter of 2007, according to data compiled by Equifax and analyzed by Moody’s Economy.com.
The percentage of mortgages in default rose to 2.87%, surpassing the worst levels following the 2001 recession.
“The news is unremittingly bad,” CNBC's Steve Liesman said Tuesday. “Delinquency rates were up in 44 of the 50 states.”
The only states where delinquencies didn’t increase were Kansas, Kentucky, Montana, North Dakota, South Carolina and Utah.
The states with the highest delinquency rates are:
West Virginia, 3.83%
Liesman said delinquencies rose in first mortgages, second mortgages and home equity loans. There also were increases in loans that are 30, 60 and 90 days past due.
“I don’t think we’re near the bottom,” said Mark Zandi, an analyst at Moody’s Economy.com who reviewed the data. “The correction is in full swing. I think we have at least a year to go.”
Zandi said he believed delinquencies will continue to increase because many sub-prime and Alt-A loans written in 2005 and 2006 will be reset to a higher rate for the first time this year or 2008.
“I think credit conditions are going to weaken measurably more,” Zandi said. “The good news, economy-wide, is that the job market is strong. As long as the job market hangs tough, I think we’ll be okay outside of housing.”
The metro areas with the highest mortgage delinquency rates are:
Brownsville, Texas, 6.01%
Corpus Christi, Texas, 5.63%
Modesto, Calif., 5.62%
Beaumont, Texas, 5.57%
Zandi said people living in these metro areas tend to have low, volatile incomes, making it difficult to manage debt.