According to Lender Processing Services (LPS) the national delinquency rate in May fell to its lowest level since May 2002. Mortgage delinquencies have dropped by a staggering 15% since the end of 2012. Could this rapid drop in mortgage delinquencies signal that the housing market is back on track? With the rapid rise in interest rates from May to June it's hard to tell.
As interest rates have risen in the last month new mortgage applications have continued to drop especially among borrowers looking to refinance their properties. While it's certainly welcome news that fewer homeowners are falling behind on their mortgages it is quite possible that there could still be some homeowners with adjustable rate mortgages who will see their mortgages payments rise and we could again see the delinquency rate worsen.