Feeling Good About Housing, With Old Mortgages Being the Buzzkill

"The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels," says Tim Martin, group vice president of U.S. housing at TransUnion. "For the most part, newer vintage mortgage loans are not the reason for the stubbornly high delinquency rate. They are performing relatively well. The elevated delinquency levels that we still are experiencing are a result of older vintage loans -- borrowers who haven't been making their payments for a rather long time that are still in the system, inflating the overall rate."

The "glass half-full" outlook shows improvements on all mortgage payment fronts, however.

But here is the "glass half-empty" story -- TransUnion analysts say the outlook for declining mortgage delinquencies is apparent, with a "continue downward trend" in early 2013, albeit at a "muted" pace.

"The declines in the mortgage delinquency rate will likely be muted for the foreseeable future, as the foreclosure process in some states can take more than 1,000 days," Martin says. "It's not clear yet, but recently announced regulatory rules related to mortgage servicing may tend to slow down this process further. What is clear from the data TransUnion collects is that, until the old vintages work through the system, we expect the delinquency rate to remain elevated."

Even so, the big picture for the U.S. housing market is one of recovery, after a half-decade of misery. And that's worth raising a glass over.