Delinquencies on home mortgages hit highest level since 2011

The increase in delinquences in May was smaller than the jump in April, as the economy ground to a halt

U.S. home-mortgage delinquencies climbed in May to the highest level since November 2011 as the pandemic’s toll on personal finances deepened.

The number of borrowers who were more than 30 days late swelled to 4.3 million, up 723,000 from the previous month, according to property information service Black Knight Inc. More than 8% of all U.S. mortgages were past due or in foreclosure.

The increase in delinquencies was smaller than the 1.6 million jump in April, when the economy ground to a halt nationwide. Still, the path ahead is clouded by the spread of new COVID-19 cases, uncertainty over business reopenings and the looming expiration of benefits that have helped jobless homeowners avert delinquency.

About 20.5 million Americans filed continuing claims for unemployment benefits in the first week of June, Labor Department figures show.

The delinquency count includes homeowners who missed payments as part of forbearance agreements, which allow an initial six-month reprieve without penalty. Many of those borrowers initially made payments despite qualifying for the relief plans, a share that has diminished as the crisis lingers.

Only 15% of homeowners in forbearance made payments as of June 15, down from 28% in May and 46% in April.

Black Knight also reported:

Mississippi had the highest delinquency rate in May, followed by Louisiana, New York, New Jersey and Florida.
New York’s share rose to 11.3%. It peaked at 13.9% in December 2012.
New Jersey’s rate was 11%, compared with the peak of 16.8% in December 2012.
Florida’s share climbed to 10.5%. Its previous peak was 25.4% in January 2010.