This comes even with some setback following Hurricane Beryl's impact on Houston
The national mortgage delinquency rate fell by 12 basis points to 3.37% in July, showing improvement after a calendar-driven rise in June, according to the latest data from Intercontinental Exchange, Inc (ICE). This decline represents a 3.5% decrease from June’s figures but remains 4.8% higher than the same period last year.
Delinquencies dropped in all major markets except Houston, where the effects of Hurricane Beryl were particularly severe. An estimated 10,000 homeowners in the Houston area fell behind on their mortgage payments due to the storm, highlighting the localized impact of the hurricane.
On a national scale, serious delinquencies—loans more than 90 days past due but not yet in foreclosure—rose by 5,000 in July, a 1.1% increase, marking a five-month high. However, this category remains 33,000 loans (7.0%) lower than levels recorded a year earlier. Meanwhile, the number of borrowers who were only one payment behind dropped by 77,000, though 60-day delinquencies saw a rise of 11,000 loans.
Foreclosure activity also experienced changes in July. Foreclosure starts increased by 7,000, a 30% rise, though this was largely attributed to a multi-year low in starts recorded the previous month rather than an indication of market stress, according to ICE. Active foreclosure inventory edged up by 2,000 loans but still sits at its second-lowest level since January 2022, remaining 34% below pre-pandemic levels.
Foreclosure completions in July reached 5,500, marking a 3.7% increase from June. However, these figures are still down 9.6% year-over-year and remain well below 2019 levels. Prepayment activity also picked up, rising to 0.60%—the highest rate since September 2022 - due to easing interest rates.
Intercontinental Exchange derived these insights from its loan-level database, which covers the majority of the US mortgage market. A detailed analysis of July’s data will be provided in ICE’s upcoming Mortgage Monitor report, scheduled for release on September 4, 2024.
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