Posted on: Wednesday, June 16, 2004

Mortgage defaults decline

By Andrew gomes
Advertiser Staff Writer

Fewer Hawai'i homeowners are defaulting on their mortgages, according to a national survey that showed the delinquency rate for Hawai'i residents in the first quarter was at a 10-year low and was better than all but two other states.

The number of foreclosures initiated also was at a 10-year low in Hawai'i, which posted the lowest rate in that category in the nation. The survey was conducted by the Mortgage Bankers Association.

The results are a reflection of the state's strong economy, low-interest financing and rising property values in a booming real estate market.

The state's delinquency rate was 1.98 percent, which has been lower only eight times since 1979, according to data from the Washington, D.C.-based organization, which used 144,153 Hawai'i mortgages on one- to four-unit residential properties in its latest survey.

Hawai'i's rate was last lower in the first quarter of 1995 at 1.79 percent, and was at 2.57 percent in the fourth quarter of last year after gradually dropping from around 3 percent in the late 1990s. Only North Dakota and South Dakota had lower first-quarter delinquency rates, at 1.80 percent, and 1.91 percent respectively. Nationally, the rate was 3.94 percent.

The rate of foreclosures started during the first quarter in Hawai'i was 0.16 percent, compared with 0.20 percent in the fourth quarter of last year after generally declining from around 0.6 percent in the late 1990s.

Among states, California's first-quarter rate was the next lowest at 0.17 percent. Nationally, the rate was 0.45 percent.

For pending foreclosure inventory during the first quarter, Hawai'i's rate was fourth lowest at 0.45 percent, behind California at 0.33 percent, Alaska at 0.43 percent and New Hampshire at 0.44 percent. The national average was 1.27 percent.

The Mortgage Bankers Association reported all state data on a nonseasonally adjusted basis. National averages were not adjusted for seasonal variations.

Association chief economist Douglas Duncan credited a strong national economy for the results, and said expected strong job growth for the rest of the year and continued strength in the housing market bode well for declines in upcoming quarters.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.