A strong job market, rising wages, and rising home values have pushed foreclosure rates in Austin to near zero, despite rising property taxes.
In a report published Tuesday, property data company CoreLogic put the Austin-Round Rock metro area’s foreclosure rate at 0.1%, down from 0.2% last year and well below the national rate of 0.4%.
Only 2.3% of home mortgages in the Austin area are at some state of delinquency, making Austin the best-performing of all of Texas’ major home markets. Austin’s serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – is at 0.6%, compared to 1.3% nationally.
CoreLogic’s data is current to July 2019.
“Homeowners have seen a big rise in home equity, which lowers foreclosure risk because owners have more ‘skin in the game,’” commented Frank Nothaft, Chief Economist for CoreLogic. “Between the first quarter of 2011 and the second quarter of 2019, average equity per borrower increased from $75,000 to $176,000 and rose $5,000 in the past year alone.”
Statewide, the average Texas homeowner has gained $5,000 in equity during the past year. Texas also has one of the lowest rates of homeowners with negative equity: 1.7%, compared to 5.2% in neighboring Oklahoma, 10.3% in Louisiana, and 5.5% in Arkansas.
Foreclosure rates are higher than Austin’s in the San Antonio-New Braunfels and Houston-Woodlands-Sugar Land areas, which had foreclosure rates of 0.3 and 0.4 percent, respectively. San Antonio’s delinquency rate was 4.9 percent, and Houston’s was 4.7 percent.
CoreLogic’s report coincided with the release of a report Tuesday by the American Bankers Association, which showed consumer credit delinquencies rising in eight of the 11 categories tracked by ABA nationally, including home equity loan delinquencies, which rose seven basis points to 2.75% of all accounts, above the pre-recession average of 2.12%.
The Bankers’ association said the overall consumer credit picture was “mixed,” rising from 2015-2016 lows but overall still positive. “Despite some fluctuations, particularly in the auto and home-related sectors, the picture for delinquencies is generally positive,” said James Chessen, ABA’s chief economist. “A strong job market and rising wages have provided a solid base for consumers that has kept delinquencies near historically low levels.”
Photo: Flickr/respres, used under a Create Commons license, CC BY 2.0)
