Mortgage Delinquencies Decline, Foreclosure Activity Rises in July, According to ICE Mortgage Technology's First Look Report.

U.S. mortgage delinquencies declined in July, improving year-over-year for the second consecutive month. Foreclosure activity rose, with an annual increase in starts for eight consecutive months. Prepayment rates edged up, marking a 12% increase from last year. The FHA delinquency rate is still 15 basis points above its level from a year ago. Overall, mortgage performance remains robust, showcasing resilience in the U.S. housing market against economic uncertainties.

U.S. mortgage delinquencies declined in July, marking the second consecutive month of year-over-year improvement. The national delinquency rate fell by eight basis points (bps) to 3.27%, a 9-bps improvement from the same period last year and 58 bps below pre-pandemic levels [1].

Serious delinquencies, or loans 90+ days past due but not in foreclosure, increased by 30,000 year-over-year to 466,000, but this is the smallest annual gain since November [1]. This trend reflects the fading impacts of recent wildfires and last year’s hurricanes [2]. FHA loan delinquencies, which account for 52% of serious delinquencies, rose by 15 bps year-over-year [1].

Foreclosure activity, however, saw an annual increase of 10% in July, with the initiation of new foreclosures rising for eight consecutive months and foreclosure sales up in each of the last five months [1]. Despite this, the national foreclosure rate remains 35% below pre-pandemic norms [2].

Prepayment rates edged up slightly to 0.67% in July, marking a 12% increase from a year ago, driven by modest improvements in interest rates [1].

Overall, mortgage performance remains robust, showcasing resilience in the U.S. housing market despite economic uncertainties.

References:
[1] https://seekingalpha.com/news/4488745-mortgage-delinquencies-ease-in-july-but-foreclosure-inventory-swells-ice
[2] https://www.morningstar.com/news/business-wire/20250825881771/ice-first-look-at-mortgage-performance-delinquencies-ease-in-july-as-foreclosure-activity-edges-higher