The delinquency rate for U.S. mortgage loans rose to a record high in the second quarter, indicating that the housing market remains weak, the Mortgage Bankers Association (MBA) said Thursday.
The combined percentage of loans in foreclosure and at least one payment past due was 13.16 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey since 1972.
The record-high numbers in the report are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure and about 9 percent had missed at least one payment.
"As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts. A year ago they accounted for one in five. While 41 states had increases in the foreclosure start rate for prime fixed-rate loans, 43 states had decreases in that rate for subprime adjustable-rate loans," said Jay Brinkmann, MBA's Chief Economist.
The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.
"Clearly we have not seen the bottom in Florida," said Brinkmann.
President Barack Obama has pledged to fight the problem, but its foreclosure prevention program, known as "Making Home Affordable," is off to a disappointing start. As of July, only about one in 10 of eligible borrowers had signed up.
The success of the program depends on the economy stabilizing. The number of first-time claims for unemployment benefits rose unexpectedly for the second straight week, the Labor Department said Thursday.
The number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised figure of 561,000.
Economists say that the housing market will not gain sustainable recovery unless the unemployment rate falls back to reasonable level.