While national mortgage delinquency rates continue to sit below pre-pandemic benchmarks, a sharp decline in loan cure activity has pushed serious delinquencies to their highest volume since 2018.

Though this surge has been predominantly driven by weakness in the Federal Housing Administration (FHA) lending segment, data released Monday by Intercontinental Exchange Inc. (ICE) paints a complex picture of the spring housing market.

A recent 40-basis-point jump in 30-year mortgage rates has eroded some early-year affordability gains, though 99 of the top 100 markets remain more affordable than they were a year ago. Meanwhile, housing inventory is steadily growing, though extreme geographic imbalances persist.

As of late February, 878,000 loans were severely delinquent or in foreclosure, according to ICE, a 25% increase over the preceding four months. If the initial pandemic-era spike is excluded, that represents the highest level of distressed loans since 2018.

FHA loans accounted for more than 80% of this increase, with cure rates among FHA loans dropping by approximately 70% since the third quarter of 2025. ICE notes that a recent reliance on forbearance plans — many of which reached the end of their initial terms earlier this year — likely contributed to this downward trend in cure activity.

On the affordability front, interest rates have been volatile. The 30-year conforming rate hit 6.35% by late March, per ICE data, pushing the monthly principal and interest payment needed to purchase the average-priced home to $2,169. This requires 28.9% of the median household income, up from 27.7% in February but still down from 30.8% a year ago and 31.7% in 2024.

Despite the recent rate uptick, prospective buyers are seeing an expanding pool of available homes. Housing inventory recorded an 8% annual increase in February, though the national figure still remains 11% below the 2017-19 pre-pandemic average.

The inventory recovery is unevenly distributed across the country. The South and West are seeing notable surpluses, particularly in states like Florida and Texas. Lakeland, Fla., currently boasts a 72% surplus compared to historical norms, while McAllen, Texas, shows a 67% surplus. Conversely, the Northeast continues to face severe deficits, with markets like Hartford and Bridgeport, Conn., running 78% below pre-pandemic active listing levels.

These regional inventory divides are directly influencing home prices. While annual home price growth slowed to 0.4% nationally in early March, the strongest firming is occurring in the Northeast and Midwest, where inventory is tight. Conversely, softening price trends persist across much of the West.

For borrowers navigating this bifurcated landscape, cost is paramount. Finding the lowest interest rate was the top priority for 75% of consumers surveyed in the 2026 ICE Borrower Insights Survey, followed closely by low lender fees at 54%.

Despite this focus on cost, older borrowers showed a reluctance to comparison shop. Nearly 60% of baby boomers considered just one lender before making a decision, the survey data shows.