It comes as very welcome news that the number of foreclosures is slowly declining from a peak in 2010 in Minnesota. But we've been curious to understand what's "normal" for Minnesota. Looking at the historical delinquency rate for mortgages going back in time can help us understand the trends. What we found was that as of Q3 of 2012, the mortgage delinquency rate was still almost three times higher than the average over several decades before the foreclosure crisis began.
Based on data from the Mortgage Bankers Association, the average rate of delinquencies on home loans* between 1979 and 2004 was 1.7%. It appears that Minnesota is still at risk for many more foreclosures ahead, even though the worst is probably behind us. Be sure to check MHP's latest "2x4" Report to be released on December 11, 2012 for additional information about housing trends in Minnesota in the 3rd quarter of 2012.
*The 60+ day mortgage delinquency rate is measured by the proportion of primary (first lien) mortgages for 1-4 unit properites that are either 60 or more days in default or in foreclosure.