Fewer Arizona Homeowners Falling Behind

Fewer AZ homeowners falling behind
from the Arizona Republic, reports that mortgage delinquencies across Arizona dropped to 3 percent at the end of March from 3.51 percent at the end of 2006, according to the Mortgage Bankers Association of America, a sign that the housing market may be on the rebound. Nationally, the delinquency rate fell to 4.84 percent, from 4.95 percent. "It's one less black cloud over Phoenix's housing market," said Jay Butler, director of Realty Studies at ASU. "But it will take a couple of quarters of lower delinquency rates and inventories of homes for sale to see if the market is turning," he added. Arizona's foreclosure rate climbed from 0.76 percent of all loans at the end of 2006 to 0.95 percent of all loans at the end of March. The state's overall rate is still low compared with the rest of the country, but the recent increase signals several more thousand people are about to lose their homes. Many of the current delinquency and foreclosure problems can be traced to the investor speculation that occurred during the frenzy of 2004 and 2005.

Nationally, a record number of homeowners entered the foreclosure process during the first quarter, topping the previous high set in the final quarter of 2006 and reflecting continued stress on the jittery housing market, according to a report released by the Mortgage Bankers Association.

The trade group's chief economist, Doug Duncan, predicted that delinquencies would likely rise, peaking later in the year. He also said rising foreclosures probably wouldn't peak until next year. "Our view is that we will probably see modest increases in delinquencies and foreclosures for the next couple of quarters," Mr. Duncan said.

The MBA reported that troubles in Ohio, Michigan, Indiana, California, Florida, Nevada and Arizona weighed down the broader housing and foreclosure numbers. Job losses in the Midwest have pushed up foreclosures there, and the housing market has quickly deteriorated in the other four states.

The delinquency rate on prime loans rose in the first quarter to 2.58% from 2.25% a year earlier. For subprime loans, the rate increased to 13.77% from 11.5%. Delinquency rates on prime adjustable-rate mortgages rose to 3.69% from 2.3% a year earlier. On subprime ARMs, the rate climbed to 15.75% from 12.02%.

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