It’s hard to imagine a personal finance situation more terrifying than foreclosure, but the mortgage crisis brought that nightmare to life for millions of Americans. Gradually, more financially strapped Americans are managing to hold onto their homes, as the mortgage delinquency rates continue to fall.
The percentage of mortgage holders behind on their payments 60 or more days has fallen to the lowest point in three years, reports TransUnion. The mortgage delinquency rate has dropped for the second consecutive quarter, declining to 5.49% in second quarter of 2012 and nearly 9% in the first six months of this year.
All but five states as well as 76% of statistical metropolitan areas showed improvement from the last quarter. The two states that suffered the most during the mortgage crisis, California and Arizona, have seen significant improvement over previous double digit delinquency rates two years ago.
This gradual decline is a positive indication that homeowners are slowly recovering from the recession, but TransUnion said celebration may be premature. TransUnion projects that the number of unpaid mortgages will not likely return to the double digit percentages from before the mortgage crisis began, but TransUnion does not expect the rate to be less than 5% this year.
“The economy has not grown at a robust rate, but it does continue to slowly improve and we believe the improvement in mortgage delinquencies will follow a similar pattern,” Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit, said in a press release. “With steadying home prices, and mortgage interest rates remaining at extremely low levels, it appears that market conditions are set up to allow for further declines in the mortgage delinquency rate.”