Mortgage prepayment speeds accelerated in December as lower rates caused refinance activity to spike, according to recent data from ICE Mortgage Technology, a division of Intercontinental Exchange Inc., owner of the New York Stock Exchange.

Prepayment speeds reached one of their fastest paces since early 2022 last month, with the single month mortality rate that tracks loan prepayment speed rising eight basis points to 0.91%, just 10 basis points lower than October’s 3 1/2-year high.

Strong refinance demand has continued into 2026, with the Mortgage Bankers Association reporting that weekly refinance application volume rose to its highest levels since September last week, as mortgage rates continued to hover near 6%, their lowest levels in more than three years.

ICE’s early look at December mortgage activity also underscored continued divergence in delinquency and foreclosure trends. Stress among conventional borrowers remained historically low in December, while weakness among government borrowers continued.

The national delinquency rate declined 16 basis points in December to 3.68%, down three basis points over the year and 26 basis points below December 2019 levels. Past-due borrowers demonstrated increased trouble getting current last month, though, which pushed the late-stage delinquency totals higher by 30,000, reaching their highest level in three years.

The latest data shows early-stage delinquencies improved in December, declining by 89,000 from the previous month to land 9,000 higher than a year earlier. Total delinquencies hit a four-year high of 3.85% in November, though ICE attributed the spike to the month ending on a Sunday, since loan payments processed the following business day were technically categorized as delinquent.

Nevertheless, foreclosure activity continued to rise in December as the termination of pandemic-era foreclosure moratoriums and expanded loss mitigation programs continued to work through the system.

Foreclosure inventory was 25% higher year over year in December, with new foreclosure filings up by around 40,000, or 28%, and foreclosure sales of 2,100 reflecting a 41% increase from last December, according to ICE.

In 2025, growth in foreclosure activity has been concentrated among government lending products supported by the Federal Housing Administration (FHA) and the Department of Veterans Affairs. The total number of loans in active foreclosure reached its highest level since early 2023, driven by a 59% yearly increase in FHA foreclosures.