Mortgage delinquencies fell to their lowest level in 12 years in August, according to the CoreLogic® (NYSE: CLGX) Loan Performance Insights Report.

The report shows that, nationally, 4% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in August 2018, representing a 0.6 percentage point decline in the overall delinquency rate compared with August 2017, when it was 4.6%.

As of August 2018, the foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.5%, down 0.1 percentage point since August 2017. The August 2018 foreclosure inventory rate tied with the April, May, June and July rates this year as the lowest for any month since September 2006, when it was also 0.5%.

The rate for early-stage delinquencies – defined as 30 to 59 days past due – was 1.8% in August 2018, down from 2% in August 2017. The share of mortgages that were 60 to 89 days past due in August 2018 was 0.6%, down from 0.7% in August 2017. The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.5% in August 2018, down from 1.9% in August 2017. This serious delinquency rate was the lowest for August since 2006 when it was 1.4%, and the lowest for any month since March 2007 when it was also 1.5%.

The share of mortgages that transitioned from current to 30 days past due was 0.8% in August 2018, down from 0.9% in August 2017. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2%, while it peaked in November 2008 at 2%.

“With home-price growth building owners’ equity, and the low national unemployment rate providing opportunities for income growth, further declines in U.S. delinquency and foreclosure rates are likely in coming months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index for the U.S. recorded 5.7% annual growth in August. This price gain helped the average homeowner build about $16,000 in equity during the prior year and reduces the likelihood of a borrower transitioning from delinquency to foreclosure.”

While serious delinquencies declined in most metropolitan areas during the last 12 months, urban centers affected by natural disasters continue to show lingering effects. As examples, the serious delinquency rate in the Houston, Naples, and Cape Coral metropolitan areas, places severely affected by Hurricanes Harvey and Irma, remained 0.4 percentage points higher than one year ago.

“Declines in delinquency rates are good news for America’s homeowners and mortgage lenders,” said Frank Martell, president and CEO of CoreLogic. “However, risks that create loan default like natural disasters, overvalued markets and an eventual rise in unemployment remain in the market. CoreLogic Market Conditions Indicator data has identified more than one-third of metropolitan areas are overvalued, putting them at risk of price declines and rising delinquencies if local job losses should occur.”