The national mortgage delinquency rate declined from the second quarter to the third quarter, but still remains above normal levels, credit bureau TransUnion said this week.

The delinquency rate, which includes the rate of borrowers who are 60 or more days past due, fell to 5.41% in the third quarter, down from 5.49% in the second quarter.

Year-over-year, the U.S. mortgage delinquency rate is down 8% from 5.88% in Q3 2011.

TransUnion calls the constant drop in late payments a positive sign for the market, but noted normal economic conditions generally bring a delinquency rate in the one-to-two percent range.

“Continued declines in mortgage delinquency rates are a welcome sign and reflect that relatively more homeowners are able and willing to make their mortgage payments each month,” said Tim Martin, group vice president of U.S. housing in TransUnion’s financial services business unit. “However, we still have a long way to go to reach more normal conditions of a delinquency rate in the 1%-to-2% range for the U.S. average.” 

Twenty-two states saw improvements in their mortgage delinquency rates, but only 49% of the nation’s metros experienced improvements in late payments on mortgages in the third-quarter.

This is down from the second quarter when 76% of the nation’s metros noted improvements in overall mortgage delinquencies.

Arizona and California — two states slammed by foreclosures and the housing meltdown — are now doing much better with Arizona’s third-quarter delinquency rate down 25% from 7.46% in 3Q of 2011 to 5.62% in the latest TransUnion report.

California’s delinquency rate, meanwhile, is down 24% from 7.29% last year to 5.56% in the most recent report.