Delinquency rate on mortgages near historic low

Flying in the face of the doom 'n gloom media accounts comes an article in SF Gate discussing how mortgage delinquencies are near a historic low.

"In California and other states with rising home prices, delinquencies have drifted to rock bottom levels in recent years. In those states, even homeowners who lose their jobs or face other financial difficulties can typically sell their homes and pocket a hefty profit. In addition, continued economic growth, low interest rates and exotic mortgages with lower monthly payments help keep delinquency rates low."

This is an important point. Even though some folks might struggle with a job loss or change in economic status, they have the luxury of being able to sell their home before the problem becomes insurmountable and are able to get out cleanly.

The argument continues to be, however, that many buyers are still over-extending themselves, and not all properties have a ton of equity waiting to save unfortunate owners. I guess only time will tell on this one.

CBS Marketwatch has another article about this same report, but mentions that Hurricane Katrina could cause this number to jump as many folks along the Gulf Coast may find it tougher to pay their bills on time.