Mortgage serious delinquencies rise 19% year-over-year in August

Serious mortgage delinquencies in the United States rose in August, ending a five-month period of improvement. According to data from Intercontinental Exchange (ICE), loans that are at least 90 days past due increased by 11,000 to a total of 574,000. This figure represents a 19% increase compared to the previous year.

The national mortgage delinquency rate rose by 14 basis points to 3.53% in August. ICE noted that much of this increase was due to calendar effects, suggesting the rate was effectively flat when accounting for July's decline. Despite the recent uptick, the delinquency rate remains 35 basis points lower than in August 2019 and below all pre-pandemic August levels.

A split is emerging in the market: while early-stage delinquencies (30 and 60 days past due) remained 21,000 lower than a year ago, more borrowers are becoming stuck in serious delinquency. Additionally, prepayment speeds fell to a 17-month low, and while foreclosure starts were 29% higher than a year earlier, they remained below pre-pandemic levels.