The national mortgage delinquency rate surged an eye-catching 45 basis points to 3.49% in June, according to data from Intercontinental Exchange (ICE), although conditions there are more complex than the headline increase quite conveys.
May’s delinquency rate fell near a record low, making June’s jump perhaps even more jarring. But a quick look at a calendar shows that June this year ended on a Sunday, which, interestingly enough, makes a bigger difference than one would initially think.
When a month ends on a Sunday, loan payments made on the last day of the month generally aren’t processed until the next business day — the first day of the next calendar month. Subsequently, stark but temporary spikes in mortgage delinquencies often accompany Sunday month-ends, and June appears to be no different.
Consider that June saw a 19.6% increase in the number of borrowers one payment past due, the largest gain since the COVID-influenced month of May 2020. Sixty-day delinquencies, meanwhile, grew 11.8% to their highest level in five months. June’s overall delinquency rate of 3.49% is the second highest the market has seen in 18 months.
ICE expects most, if not all, of those big leaps to reverse themselves by the close of July.
June’s anomalous shifts notwithstanding, overall mortgage performance remains historically stout, according to ICE. Serious delinquencies, for example, were still down 8.5% annually and 10.1% below pre-pandemic water-marks, even after a 5.1% month-over-month gain.
Foreclosure statistics also compare well to pre-COVID levels, with active foreclosure inventory at its lowest point since federal and state moratoria were lifted post-pandemic. That inventory now stands some 34% below pre-pandemic levels, helped by a 6.2% drop in foreclosure starts during June. Foreclosure sales, meanwhile, saw a 14.9% month-to-month decline, dropping to roughly 5,300. That’s the least since February 2022 and easily under pre-pandemic norms.
