Foreclosure sales reach levels not seen in two years
Mortgage delinquencies in the US showed signs of easing in December 2024, though they ended the year close to a three-year high.
According to data from Intercontinental Exchange, Inc. (ICE), the national delinquency rate decreased by two basis points to 3.72% in December. However, it marked a 4.0% increase compared to the same month the previous year, continuing a streak of annual increases for the seventh consecutive year.
Early-stage delinquencies, which indicate loans that are just starting to miss payments, saw a decline of 41,000 loans, or 3.6%, from November.
On the other hand, serious delinquencies - loans 90 or more days past due but not yet in foreclosure - continued their upward trend, rising by 29,000 loans, or 5.7%, in December.
This was the fifth straight monthly increase in serious delinquencies on a year-over-year basis.
Foreclosure activity showed a mixed pattern. Foreclosure sales dropped by 5,000, or 5.6%, to their lowest level in nearly two years. Meanwhile, foreclosure inventory - properties in the foreclosure process - rose by 7,000, or 3.8%, though it was still down 10.7% compared to December 2023.
The number of foreclosure starts, which measures new cases of loans entering the foreclosure process, experienced volatility in December due to holiday-related disruptions. However, the average monthly foreclosure starts in 2024 were 26,800, a decrease from 28,500 in 2023. This was the lowest rate since the end of the pandemic-related moratoria.
Prepayment activity, which reflects the rate at which homeowners are paying off loans early, fell to 0.57% in December, a decline of 9.8% from November. Despite this decrease, prepayments were up 47.2% compared to the same period in 2023, largely due to rising interest rates.
The statistics, derived from ICE's loan-level database, represent a substantial portion of the national mortgage market.
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