As the economy continues to make strides toward a recovery, data from a new report shows positive movement in the housing sector, as more homeowners were able to keep up with their monthly mortgage payments in the third quarter.
Information from TransUnion reveals the rate of borrowers who were 60 or more days delinquent fell to 5.41 percent in the third quarter, down from 5.49 percent in the previous quarter. The rate has fallen in every quarter so far throughout 2012.
According to the data firm, 22 states posted quarter-over-quarter improvements when compared to the last quarter. When looking at the number of delinquencies from last year, 42 states posted lower rates.
However, only some metropolitan statistical areas posted a significantly lower amount of improvements when compared to the first two quarters, as only 49 percent of major metros surveyed posted gains in the third quarter, while 73 saw growth in the first quarter and 76 percent in the second.
Western MSAs post improvements, lower rate expected for fourth quarter
Some states including Arizona and California were hit hardest by the housing market slump and saw a large number of foreclosures and forced short sales, however many of these areas have bounced back the quickest.
In Arizona, the delinquency rate has dropped nearly 25 percent when compared to the same time last year. California posted a similar recovery, as the mortgage delinquency rate was down 24 percent on a year-over-year basis in the third quarter.
TransUnion notes that only eight states posted year-over-year increases in delinquencies.
While the trend has been consecutive throughout the first three quarter of the year, the fourth quarter can be a slow time for the real estate industry. However, it may be difficult to predict financial habits of consumers.
"Continued declines in mortgage delinquency rates are a welcome sign and reflect that relatively more homeowners are able and willing to make their mortgage payments each month," said Tim Martin, vice president of U.S. Housing in TransUnion's financial services business unit. "However, we still have a long way to go to reach more 'normal' conditions of a delinquency rate in the 1-2 percent range for the U.S. average."
Other aspects of the housing market have also been improving, including household incomes and consumer sentiment.