96
The Big Finish
Wrap your head
around the market's
leading indicators.
THE RELATIONSHIP
BETWEEN EMPLOYMENT
RATES AND LOAN
PERFORMANCE
CoreLogic's Loan Performance Insights Report, covering data through November 2020, showed that, nationwide, 5.9% of
mortgages were 30-plus days past due. is represented a two-percentage-point increase in the overall delinquency rate compared to
November 2019.
e study noted that changes in the unemployment rate have had a major impact on loan performance. e unemployment rate
fell from 14.8% in April to 6.7% by the end of 2020, CoreLogic reported, adding that the recent rebound in employment has helped
some struggling homeowners begin to make payments again.
"Urban areas hit hard by the pandemic recession or by a natural disaster experienced the largest spike in delinquency over the last
year," Frank Nothaft Chief Economist for CoreLogic said. "Forbearance and loan modification helped struggling families rebuild
their financial house in hard-hit places. While vaccination will mitigate the pandemic, the best cure for delinquency is income
restoration through job creation."
Below is a breakdown of how the share of unemployment claims correlated with the month's overall delinquency rate in a
selection of states.
STATE SHARE OF UNEMPLOYMENT
CLAIMS THROUGH NOV. 2020
OVERALL DELINQUENCY
RATE (NOV. 2020)
LOUISIANA 3.6% 9.7%
MISSISSIPPI 2.5% 8.9%
NEW YORK 4.5% 8.5%
NEW JERSEY 3.4% 8.0%
MARYLAND 2.4% 7.6%
*data from CoreLogic, U.S. Department of Labor
