Nevada forecast to have largest mortgage delinquency dip in ’13

Nevada is expected to experience the largest decline in mortgage delinquencies nationwide in 2013, although the state's average delinquency rate is forecast to remain above the national average, an analyst from TransUnion financial services said Wednesday.

Credit card delinquencies are expected to rise slightly and are projected to trump the national average.

Nevada will end the year with a 60-day mortgage delinquency rate of 10.26 percent, and will fall to 8.35 percent at the end of 2013, said Tim Martin, group vice president of U.S. housing for Chicago-based TransUnion. The national rate is estimated at 5.32 percent at the end of this year.

Nevada's delinquency rate is down 18 percent from a year ago.

"Things have been improving over the last couple of years," Martin said. "When I think about Nevada, unfortunately, part of it is you're seeing so much improvement because things were so bad. You had a lot of room to come down."

Nevada showed a 16.19 percent mortgage delinquency rate in fourth quarter 2009, and Las Vegas reached a peak of 18.89 percent delinquency at that time.

A couple of macroeconomic variables are working in Nevada's favor, including home price appreciation and lower unemployment, Martin said.

Nationally, mortgage delinquencies are expected to improve modestly, but remain well above the historical delinquency range of 1.5 percent to 2 percent.

At the current rate of improvement, it may take several years for mortgage delinquency rates to return to "normal" levels, Martin said.

Excluding strategic defaults, or borrowers who haven't made a mortgage payment in more than a year, the national delinquency rate would be cut in half, the TransUnion analyst said.

"We're not draining the pool fast enough on a national basis," he said. "Nevada is doing a better job of that. The entire country is improving for the third year, but make no mistake about it, we're well above normal. If the pace of improvement in delinquencies slows, it's going to be a long time before we get back to normal."

Credit card delinquencies, meanwhile, are a little different story, Martin said. They're expected to remain near record-low levels. Nevada is at 0.92 percent, and the nation as a whole is at 0.83 percent, well below the industry norm. The national average was 1.25 percent before the recession.

Although credit card balances are expected to rise, TransUnion's forecast of low delinquency rates indicates consumers are managing their credit card debt wisely, Martin said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.