Mortgage balances starting to rise

CEDAR RAPIDS - Average mortgage balances increased nationwide to $187,139 in the fourth quarter of 2014, up from $185,496 in the final quarter of 2013.

That continued a recent trend of yearly growth, according to TransUnion, a Chicago-based credit and information management company. The average mortgage balance stood at $183,339 in the fourth quarter of 2012.

TransUnion's analysis found the greatest increases in average mortgage balance were found in the super prime risk category, where balances rose approximately 3 percent in the last year.

The mortgage delinquency rate - the rate of borrowers 60 days or more delinquent on their mortgages - declined for the 12th straight quarter to 3.29 percent at the end of the fourth quarter of 2014 from 3.84 percent in the same period of 2013.

Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit, said in a statement that the mortgage delinquency rate is slowly receding to pre-recession levels, driven primarily by the ongoing clearance of the foreclosure backlog.

Becker said the continued rise in average mortgage balances can be attributed to consumers who took advantage of a low interest rate environment to purchase homes with jumbo mortgage loans.

'The share of these loans among all mortgage originations increased by 8 percent in the third quarter of 2014 from 6.8 percent in the same quarter of 2013 and 5.8 percent in the third quarter of 2012,” Becker said.

Average mortgage balances in the fourth quarter of 2014 rose in all but two states - Wisconsin and Rhode Island - on a year-over-year basis. Every state and the District of Columbia experienced declines in mortgage delinquency rates on both a quarterly and yearly basis in fourth quarter of 2014.

'Despite more non-prime mortgage originations, we are seeing continued declines in the mortgage delinquency rate,” Becker said. 'This points to the ongoing re-emergence of consumers prioritizing their mortgage payments, bolstered by an improving employment situation.

'We are in a far better position than we were immediately post-recession, and materially better than we were even a year ago.”