Record unemployment caused by the coronavirus pandemic led to the largest one-month increase in mortgage delinquencies ever recorded.
The number of borrowers who stopped paying their home loans spiked by 1.6 million last month, new data show.
Not even during the Great Recession did delinquencies rise this fast. During that time, it took 18 months before there was a single-month increase as large.
The national delinquency rate soared to 6.45 percent in April, up from 3.06 percent in March and three times the previous single-month record set in 2008, according to data released this week by Black Knight, a real estate data and analytics company. The 3.6 million borrowers who are now past due is the most since 2015.
The data represents homeowners who didn’t make a mortgage payment in April, including those who are in forbearance plans. It comes from the company’s loan-level database representing a majority of the national mortgage market.
‘‘This is truly uncharted territory,’’ Andy Walden, economist and director of market research at Black Knight, wrote in an e-mail. ‘‘During the last financial crisis, it took more than a year and a half before we saw the first 1.6 million homeowners fall past due on mortgages as a result. In the economic fallout from covid-19, that many people became past due in April alone.
‘‘Given that just 21 percent of the now 4.75 million homeowners in forbearance have made their May payments so far, this is a trend that is likely to continue.’’
You only need to look at the job market to understand why so many people aren’t paying their mortgages. The US economy shed 20 million jobs in April, and the unemployment rate soared to its highest level since the Great Depression as many businesses nationwide shuttered.
The impact has been swift and severe: An additional 2.4 million Americans filed jobless claims last week, the Labor Department announced, pushing the nation’s nine-week total past 38 million.