A report by the Federal Reserve Bank of Richmond shows that mortgages in Maryland and the District of Columbia generally have performed better than the national average, despite volatility in house prices and rising rates of delinquency and foreclosure. The report provides information on the composition and performance of prime and subprime mortgage loans at the MSA level and for selected counties in Maryland and the District of Columbia. (Subprime mortgage loans are those made to people with credit scores of 620 or below.)
House prices grew faster in Maryland than in the nation between 2003 and 2007, but at a slower rate than in states like California and Florida, which were hit the hardest during the housing market downturn. In the District of Columbia, house price growth outpaced the nation during the same four-year period and was roughly on par with California and Florida from 2003 to 2006. But the District of Columbia’s 6.9 percent price decline since the third quarter of 2007 has been much smaller than that of the Washington, D.C., metropolitan division (14.7 percent) or the state of Maryland (8.4 percent).
Maryland’s foreclosure rate for prime mortgages – 1.33 percent — was below the national average – 1.88 percent — during the fourth quarter of 2008. Still, the state had the highest foreclosure rate in the Fifth District, particularly in the areas of Maryland closest to Washington, D.C. Other areas of the state with high foreclosure rates for prime mortgages include Baltimore city, the Hagerstown MSA, and parts of Dorchester and Caroline counties on the Eastern Shore. Maryland ranked just below the national average for percentage of subprime mortgages in foreclosure, while the District of Columbia had the highest subprime foreclosure rate in the Fifth District.
“The Maryland portion of the Washington, D.C., MSA, particularly to the south and east of the District of Columbia, continues to see the highest mortgage delinquency and foreclosure rates in this region,” observed Sonya Ravindranath Waddell, associate regional economist. “It is likely that rates will continue to rise in the Washington, D.C. metro area, in Maryland, and in the nation as long as declines in house price and increases in unemployment persist.”
Read the full report.
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.
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