As expected, July saw some correction toward the upside in the national mortgage delinquency rate, which dropped 12 basis points to partially offset a big leap from the previous month, according to Intercontinental Exchange (ICE).
June saw a mammoth 45 basis-point surge in the delinquency rate, partially because the month ended on a Sunday — which, as it turns out, makes a bigger difference than one would initially think. July’s rebound brought the delinquency rate back down to 3.37%, down 3.5% month over month, though it’s still up 4.8% from July last year.
Delinquencies improved nationally despite the negative impact of Hurricane Beryl, which ravaged the Gulf Coast of Texas in early July. Per ICE estimates, the destructive storm resulted in some 10,000 mortgage holders from the Houston area falling behind on their loan payments. Notably, delinquencies decreased in every other major market.
By count, there are approximately 1.8 million properties across the United States with mortgages that were at least 30 days past due (but not in foreclosure) in July. That’s a downshift of some 61,000 properties month over month but remains up by roughly 112,000 properties from the same month last year.
The number of loans that were just a single payment overdue fell by 77,000 in July, but 60-day delinquencies rose by 11,000. Serious delinquencies (loans at least 90 days past due, but not in active foreclosure) were up roughly 5,000 loans, reaching a five-month high.
Foreclosure starts did rise by 7,000 in July, a monthly jump of 30%. But according to ICE, that’s somewhat due to volatility and starts hitting a multi-year low in the month before, rather than a warning sign of market pressure.
Foreclosures have been running low all year, ICE noted, thanks partially to high collective home equity among homeowners and more loss mitigation options offered by lenders and servicers. Consider that active foreclosure inventory crept upward by 2,000 in July, but still remains at its second-lowest level since the beginning of 2022 and is still hovering 34% below pre-pandemic levels. There were 5,500 foreclosure sales in July, up 3.7% from June but down 9.6% year over year.
