Key facts
- New mortgage default activity stabilized in June.
- New defaults among FHA borrowers fell 15% year-over-year.
- Overall delinquency rate was 3.55%, below the pre-pandemic benchmark of 4.16%.
- Serious delinquencies fell to 570,000, the lowest in six months.
- Active foreclosure inventory rose to 0.53%, a six-year high.
- Total non-current loans were approximately 2.25 million.
Mortgage default activity remained stable in June, with new defaults among Federal Housing Administration (FHA) borrowers declining 15% from the previous year, marking the largest annual decrease in over four years. Intercontinental Exchange's (ICE) First Look Mortgage Performance report indicated that overall mortgage performance was strong, despite a seasonal uptick in early-stage delinquencies.
Andy Walden, head of mortgage and housing market research at ICE, noted that new default activity has leveled off, which is a positive sign. He highlighted the 15% year-over-year decrease in new FHA defaults as particularly encouraging. The overall delinquency rate stood at 3.55%, below the pre-pandemic benchmark of 4.16% recorded in June 2019.
Serious delinquencies, defined as loans 90 or more days past due but not yet in foreclosure, decreased to 570,000, reaching a six-month low. Improvements were also observed in early-stage mortgage performance, with fewer borrowers moving into 30-day and 60-day delinquency categories on both monthly and annual bases.
However, the active foreclosure inventory rate increased to 0.53%, the highest in six years, and foreclosure starts also reached a six-year high. Foreclosure sales saw a 16% increase from the prior year, though they remain 46% below pre-pandemic levels. Bob Hart, President of ICE Mortgage Technology, attributed the market's resilience to high homeowner equity, which helps distressed borrowers avoid foreclosure. Mortgage prepayment speeds slowed in June, influenced by elevated mortgage rates, but remained above year-ago levels.