96
The Big Finish
Wrap your head
around the market's
leading indicators.
HOW HURRICANES AFFECT
LOCAL DELINQUENCY RATES
Almost 8 million homes with more than $1.9 trillion in reconstruction cost value are at risk of storm surge damage in 2021, according to the
2021 Hurricane Report from property data analytics provider CoreLogic.
e report—focused on single and multifamily residences along the Gulf and Atlantic coasts—takes a closer look at how the hurricane damage
to a property affects the owner's ability to pay the mortgage. It also examines the impact of hurricanes on the nation's housing supply, which already
is alarmingly short.
For homeowners, the result of a financial catastrophe results in a significant increase in mortgage delinquency rates as people, crippled by
expenses and lost wages, fail to make monthly payments, according to the report. After Hurricane Laura made landfall in Lake Charles, for
example, the already-elevated delinquency rate went up from 9.8% in August 2020 to 16.1% in September 2020, an increase of 6.3 percentage
points, according to the report.
"To provide a 360-degree view of the impact of climate change, we took a look at the U.S. housing economy after a hurricane strikes and noticed
a significant spike in mortgage delinquency rates and loss in housing inventory," said Frank Nothaft, Chief Economist at CoreLogic. "Communities
most affected by natural and financial catastrophe include those with already-high delinquency rates such as in Lake Charles, Louisiana, as reflected
in the pre- and post-Hurricane Laura landfall rates."
2.9
2.6
2.3
2.0
1.7
1.4
1.1
0.8
t-6 t-3 t t+3 t+6 t+9 t+12
Months before or after Disaster (t is month of disaster)
Hurricanes
Houston (Harvey): Aug 2017
Wilmington (Florence): Sep 2018
Panama City (Michael): Oct 2018
Wildfires
Santa Rosa (Tubbs): Oct 2017
Chico (Camp): Nov 2018
Panama City
Houston
Wilmington
Chico
Santa Rosa
Delinquency Rates Jump After a Disaster
Serious Delinquency Rate (as a multiple of rate in month of disaster)
Source: CoreLogic
