May 28 (Bloomberg) -- Mortgage delinquencies and foreclosures rose to records in the first quarter and home-loan rates jumped to the highest since March this week as the government’s effort to fix the housing slump lost momentum.

The U.S. delinquency rate jumped to a seasonally adjusted 9.12 percent from 7.88 percent, the biggest-ever increase, and the share of loans entering foreclosure rose to 1.37 percent, the Mortgage Bankers Association said today. Both figures are the highest in records going back to 1972. Fixed rates rose to 4.91 percent, Freddie Mac said, and an increase in bond yields earlier this week shows rates may continue rising.

The three-year housing decline is proving resistant to efforts by the Federal Reserve and the Obama administration to keep homeowners current on mortgages by allowing them to refinance or sell to buyers enticed by affordable terms. Prime fixed-rate home loans to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, MBA said, a sign job losses are hurting homeowners.

“If people don’t have a paycheck they can’t support a mortgage,” Jay Brinkmann, the MBA’s chief economist, said in an interview. “The longer the recession lasts the more people run through their savings reserves, leading to higher delinquencies and higher foreclosures.”

Rates Rise

One in every eight Americans is now late on a payment or already in foreclosure as mounting job losses cause more homeowners to fall behind on loans, the MBA said.

About half of the new foreclosures were in four states: California, Florida, Arizona and Nevada, according to the report. Measuring both old and new defaults, 11 percent of all mortgages in Florida were in foreclosure at the end of the first quarter, the highest in the U.S. In Nevada, it was 7.8 percent, in Arizona, it was 5.6 percent, and in California, it was 5.2 percent. New Jersey’s foreclosure inventory was 4.3 percent, New York was 3 percent, and Massachusetts was 2.8 percent.

The average rate for a 30-year loan jumped from 4.82 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today in a statement. The rate was 5.1 percent at the beginning of the year.

New home sales fell 34 percent in April from the year earlier period, the Commerce Department said today. The unemployment rate increased to 8.1 percent in the first quarter, the highest since the end of 1983, according to the Bureau of Labor Statistics.

Foreclosure Inventory

The inventory of new foreclosures and those already in the process of being foreclosed upon jumped to 3.85 percent, the MBA said. Half the loans now in foreclosure, adding the new and existing defaults, are held by prime borrowers, according to the trade group’s report. About 43 percent are subprime mortgages, and 7.1 percent are Federal Housing Administration loans. A year ago, subprime mortgages accounted for 54 percent of the U.S. foreclosure inventory. Prime fixed rate mortgages accounted for 19 percent of new foreclosures in the year earlier period.

Prime adjustable-rate mortgages accounted for 24 percent of new foreclosures, up from 23 percent, Brinkmann said. The figures show that the mortgage crisis has shifted from subprime to borrowers holding the safest type of mortgages.

Subprime adjustable mortgages accounted for 27 percent of new foreclosure, falling from a share of 39 percent a year ago, Brinkmann said.

Economic Recovery?

Delinquencies are continuing to rise even as forecasts show the economy may start improving later this year. The U.S. economic recession probably will end in the third quarter, a survey of business economists showed yesterday, even as rising joblessness indicates the recovery will be weaker than previously estimated. The world’s largest economy will begin to expand next quarter, according to 74 percent of economists in a National Association for Business Economics survey.

Home sales may reach a bottom by mid-year, according to 72 percent of the panelists, and more than six in 10 predicted housing starts will hit a trough by that time. The survey showed home prices have further to fall, with 40 percent of the respondents forecasting that declines will continue into 2010 or later.

New home sales fell 34 percent from April 2008, the Commerce Department said today, while home resales gained as foreclosure auctions enticed bargain hunters, the Chicago-based National Association of Realtors said yesterday.

Existing Home Sales

Purchases of existing homes increased 2.9 percent to an annual rate of 4.68 million from 4.55 million in March, the trade group said. The median price slumped 15 percent from a year earlier, the second-biggest drop on record, and distressed properties accounted for 45 percent of all sales.

The Realtors said in a May 12 report foreclosures dragged down the first-quarter median U.S. price by 14 percent to $169,000 from a year earlier, the biggest decline on record.

The U.S. median home price tumbled 9.5 percent last year, the most ever recorded, according to the Realtors’ group. That’s more than six times the 1.4 percent drop in 2007, the first decline in the national median since the 1930s.

This year, prices probably will fall 4.9 percent before posting a 4.4 percent gain in 2010, according to Lawrence Yun, the trade group’s chief economist.

To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.

Last Updated: May 28, 2009 14:22 EDT