The U.S. mortgage delinquency rate was around 3.34% as of the end of October, down about 2% compared with September and down about 3% compared with October 2024, as loan performance remained healthy, according to ICE Mortgage Technology’s latest First Look report.
There were about 1.84 million mortgages 60 days or more delinquent but not in foreclosure, according to the report. That’s down about 36,000 compared with the previous month and down about 28,000 compared with as year earlier.
In another sign that lawn performance has held steady, about 476,000 mortgages were seriously delinquent in October, down about 1,000 compared with the previous month and down about 3,000 compared with a year earlier.
There were about 38,000 foreclosure starts in October, down about 10% compared with September, but up nearly 30% compared with October 2024.
Although October foreclosure starts slowed from the prior month, the overall trend continues to rise: Foreclosure inventory is up significantly from last year’s levels.
And the number of loans in active foreclosure hit its highest level since early 2023, driven by a notable rise in FHA foreclosures, along with a resumption of VA activity following last year’s moratorium.
The total foreclosure pre-sale inventory rate was 0.41%, and increase of 1.65% compared with September and up more than 17% compared with October 2024.
As of the end of October, there were about 226,000 properties in the foreclosure pre-sale inventory, an increase of about 4,000 compared with the previous month and an increase of about 37,000 compared with a year ago.
The monthly pre-payment rate increased to 1.01%, up nearly 37% compared with September and up nearly 20% compared with October 2024.
“Softening mortgage rates expanded the pool of refinance candidates in October, pushing prepayments to their highest level in three and a half years,” says Andy Walden, head of mortgage and housing market research at ICE, in the report. “This trend was largely driven by people who purchased homes at elevated rates in recent years seizing the opportunity to lower their monthly payments.”
“Overall mortgage health remains solid, with continued improvement in delinquency rates across all stages,” Walden says. “While foreclosure activity has ticked up, levels remain historically low. This uptick is driven by a rise in FHA foreclosures along with the resumption in VA foreclosures following last year’s moratorium.”
Photo: Alexander Grey