Record unemployment caused by the coronavirus pandemic led to the largest one-month increase in mortgage delinquencies ever recorded. The number of borrowers who stopped paying their home loans spiked by 1.6 million last month, new data show.
Not even during the Great Recession did delinquencies rise this fast. During that time, it took 18 months before there was a single-month increase as large.
The national delinquency rate soared to 6.45 percent in April, up from 3.06 percent in March and three times the previous single-month record set in 2008, according to data released this week by Black Knight, a real estate data and analytics company. The 3.6 million borrowers who are now past due is the most since 2015.
The data represents homeowners who didn’t make a mortgage payment in April, including those who are in forbearance plans. It comes from the company’s loan-level database representing a majority of the national mortgage market.
You only need to look at the job market to understand why so many people aren’t paying their mortgages these days. The U.S. economy shed 20 million jobs in April and the unemployment rate soared to its highest level since the Great Depression as many businesses nationwide shuttered. The impact has been swift and severe: An additional 2.4 million Americans filed jobless claims last week, the Labor Department announced, pushing the nation’s nine-week total past 38 million.