The delinquency rate for U.S. mortgages payments significantly overdue fell sharply in the first quarter, reaching the lowest level since early 2009, an industry group showed on Thursday.
The U.S. Mortgage Bankers Association said in the first quarter of 2011, the percent of loans that were seriously delinquent was 8.10 percent, 50 basis points lower than the fourth quarter of 2010 and 144 basis points lower than a year ago.
It was the fifth straight quarter that showed declines in the seriously delinquent rate.
The improvement is a significant positive for the housing market, which continues to lag improvement seen in other sectors of the U.S. economy. Loans that are seriously delinquent pose the greatest risk to the housing market as they are the most vulnerable to foreclosures.
Jay Brinkmann, the MBA's chief economist, said the drop in serious delinquencies was driven by an improving U.S. economy and jobs market.
Most of these numbers from the first quarter point to a mortgage market on the mend, he said.
Brinkmann said if the economy and jobs market continues to improve the 90-day delinquency rate should continue to head lower.
Everything hinges on the number of paychecks, he said.
Foreclosure starts, meanwhile, were at the lowest level since the end of 2008 and had the second largest drop ever.
The non-seasonally adjusted foreclosure inventory rate for all loans at the end of the first quarter of 2011 was 4.52 percent, 12 basis points lower than the fourth quarter 2010 rate of 4.64 percent and 11 basis points lower than the first quarter 2010 rate of 4.63 percent, the MBA said in its Q1 National Delinquency Survey.