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Yet she cautioned the decline in delinquencies is likely short-lived: “We’re still forecasting for an economic slowdown, a mild recession, in the second half of the year,” she said. “That’s been pushed back a bit, but between hospitality and services jobs, we’re still seeing strong results in terms of the jobs market.”
She reiterated that a change is afoot: “If you look at our MBA forecast, we anticipate the unemployment rate is going up, and should end the year in 2023 at about 4.9%. So we are anticipating that the unemployment rate is going up, and with that unemployment rate, we will see an increase in delinquencies.”
Until then, the jobs market continues to boom across the board: “Consistent with the resilient job market, the performance of existing mortgages is exceeding expectations. Across all states, there was an improvement in the first quarter compared to one year ago. Year-over-year delinquencies for all product types – FHA, VA, and conventional – were also down.”
Loans in forbearance fall
A less dramatic drop was seen in the total number of loans now in forbearance. In a separate report – the MBA’s monthly Loan Monitoring Survey – the total number of loans now in forbearance decreased by four basis points from 0.55% of servicers’ portfolio volume in the prior month to 0.51% as of April 30.
According to MBA’s estimate, 255,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 7.8 million borrowers since April 2020, the report found. Moreover, in April 2023, the share of Fannie Mae and Freddie Mac loans in forbearance decreased two basis points to 0.24%.
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