WASHINGTON — Mortgage delinquencies and foreclosures reached record levels in the first three months of this year, driven higher by increasing housing woes in California and Florida, the Mortgage Bankers Assn. reported Thursday.
Nationally, 6.35% of all mortgages were at least 30 days past due -- but not yet in foreclosure -- on a seasonally adjusted basis in the first quarter, up from 5.82% in the fourth quarter of last year and 4.84% in the first three months of 2007, the association reported.
An additional 2.47% of mortgages were in the process of foreclosure on March 31, up from 2.04% at the end of last year and 1.28% at the end of March 2007. Those figures aren't seasonally adjusted.
"The problems in California and Florida are extraordinary and they are the main drivers of the national trend," said Jay Brinkmann, the association's research chief.
California accounts for 13% of the nation's mortgages but is responsible for 21% of the homes that entered the foreclosure process in the latest period. Florida accounts for 8% of the nation's mortgages and 15% of foreclosures.
The number of foreclosure starts reached a new 29-year high, as did the percentage of homes in foreclosure and the percentage in delinquency.
Although the mortgage crisis began in the sub-prime market, the number of troubled prime loans is on the rise. Of all loans that entered the foreclosure process in the first quarter, 42% were prime mortgages and 50% were sub-prime loans. Loans insured by the Federal Housing Administration accounted for the remainder.
California's delinquency rate actually fell in the first quarter to 5.26%, which was below the national average, from 5.39% in the fourth quarter.
But Brinkmann said delinquent loans were more likely to turn into foreclosures in California than in other parts of the country because of the severity of the home-price declines in the Golden State.
Bearing that out, the percentage of the state's loans in foreclosure soared to 3.13% as of March 31 from 2.23% three months earlier.
The foreclosure data overall suggest "a flood of homes back onto the resale market," worsening the outlook for prices, Merrill Lynch & Co. economists wrote in a note Thursday.
Shares of home builders fell on the news. A Standard & Poor's index of 15 major builders' stocks lost 0.8% to close at its lowest level since March. At one point during the day, the index was down 3.7%.
About 20 states saw declines in the number of foreclosures, including Michigan, Ohio and Indiana, Brinkmann said.
But that improvement was more than offset by increases in California, Florida, Nevada and Arizona, which together accounted for 42% of all foreclosure starts in the period.
Reynolds reported from Washington, Petruno from Los Angeles.