ICE First Look at Mortgage Performance: Continued Improvement in April Leads to Fewest Serious Delinquencies in 18+ Years

Rhea-AI Summary

The national delinquency rate in April 2024 fell to 3.09%, the second lowest on record, marking a 22 basis point improvement from April 2023. Serious delinquencies dropped to their best level since August 2005, decreasing by 17,000 from March and 84,000 year over year. The number of single-payment past-due borrowers hit an 8-month low, and 60-day delinquencies reached a 10-month low. Foreclosure starts declined by 0.8% from March, leading to the lowest number of active foreclosures since January 2022. April saw a 1.5% increase in foreclosure sales, yet they remain about half of pre-pandemic levels. Prepayment activity rose to its highest since August 2023 due to a seasonal rise in home sales, despite ongoing rate-driven affordability challenges. Overall, the performance data highlights continued improvement in mortgage health, with significant reductions in delinquency and foreclosure rates.

Positive

• National delinquency rate fell to 3.09%, second lowest on record.
• Serious delinquencies decreased to their best level since August 2005.
• Single-payment past-due borrowers dropped to an 8-month low.
• 60-day delinquencies fell to a 10-month low.
• Foreclosure starts declined by 0.8% from March.
• Active foreclosures hit the lowest level since January 2022.
• Prepayment activity increased due to a seasonal rise in home sales.

Negative

• Foreclosure sales increased by 1.5% month-over-month.
• Consumers face continued rate-driven affordability and refinance challenges.

Financial Analyst

ICE's recent performance report on the national mortgage market reveals significant improvements in mortgage delinquency and foreclosure rates. The national delinquency rate stands at 3.09%, the second lowest on record, indicating enhanced borrower stability and effective loan management. Lower delinquency rates often suggest improved economic conditions, which can positively impact financial institutions and, by extension, the broader stock market.

For investors, the notable decline in serious delinquencies (loans 90+ days past due) to their best level since August 2005 is particularly encouraging. This reduction not only lowers potential risks for banks and mortgage lenders but also implies healthier balance sheets. Additionally, the drop in foreclosure starts and the number of loans in active foreclosure to levels significantly below pre-pandemic times further underscores the market's stability.

Prepayment activity rising by 8.39% month-over-month reflects increased home sales, despite ongoing affordability challenges. While higher prepayment rates can reduce the lifespan of mortgage-backed securities (MBS), they can also signal a robust housing market, potentially driving up demand for real estate-related investments.

Finally, the data suggests that the impact of rate-driven affordability issues might be waning, creating a more favorable environment for both consumers and investors. Lower delinquency and foreclosure rates contribute to a more stable financial system, which is appealing to retail investors looking for lower-risk opportunities.

Market Research Analyst

The insights from ICE's mortgage performance report shed light on regional disparities in mortgage health. States like Mississippi, Louisiana and Alabama show higher non-current loan percentages, indicating potential areas of concern or opportunities for targeted financial products and services. Conversely, states like Oregon, Montana and Idaho exhibit much lower non-current rates, highlighting stronger mortgage performance in these regions.

The year-over-year improvement in delinquency rates across most states points to a broad-based recovery, but the modest increases in foreclosure sales and starts in some regions signal that challenges still exist. Investors should note the state-specific variations in mortgage performance, which might influence regional housing markets and related investments differently.

From a market perspective, the rising prepayment activity, driven by seasonal home sales, suggests potential upticks in housing market transactions, which could benefit companies in real estate, home improvement and related sectors. The data indicates a resilient housing market, which could bolster investor confidence in these industries.

• The national delinquency rate fell to 3.09% in April – its second lowest level on record behind only March 2023’s record low of 2.92% – marking a 22 basis point (bps) improvement from the same time last year
• Serious delinquencies (loans 90+ days past due but not in active foreclosure) improved to their best level since August 2005, down -17K (-4.0%) from March and -84K (-16.8%) year over year
• The number of borrowers a single payment past due dropped by 30K to hit an 8-month low, while 60-day delinquencies fell 6K to their lowest level in 10 months
• The inflow of new 30-day lates along with rolls to later stages of delinquency improved from March, while cures were down among both early and late stage delinquencies
• Foreclosure starts declined -0.8% from March, pushing the number of loans in active foreclosure to its lowest level since January 2022 – some 30% below (-84K) pre-pandemic levels
• Though the 5.9K foreclosure sales completed nationally in April represented a 1.5% month-over-month increase, they remain at roughly half pre-pandemic norms
• Prepayment activity rose to its highest level since August 2023 due to a seasonal upswing in home sales, despite consumers still facing rate-driven affordability and refinance headwinds

ATLANTA & NEW YORK--(BUSINESS WIRE)-- Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, reports the following “first look” at April 2024 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.

Data as of April 30, 2024

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 3.09%

Month-over-month change: -3.28%

Year-over-year change: -6.63%

Total U.S. foreclosure pre-sale inventory rate: 0.37%

Month-over-month change: -3.31%

Year-over-year change: -16.42%

Total U.S. foreclosure starts: 26,000

Month-over-month change -0.83%

Year-over-year change: 4.01%

Monthly prepayment rate (SMM): 0.52%

Month-over-month change: 8.39%

Year-over-year change: 18.83%

Foreclosure sales: 5,900

Month-over-month change: 1.55%

Year-over-year change: - 7.87%

Number of properties that are 30 or more days past due, but not in foreclosure: ​ 1,658,000

Month-over-month change: -53,000

Year-over-year change: -88,000

Number of properties that are 90 or more days past due, but not in foreclosure: 417,000

Month-over-month change: -17,000

Year-over-year change: -84,000

Number of properties in foreclosure pre-sale inventory: 199,000

Month-over-month change: -6,000

Year-over-year change: -35,000

Number of properties that are 30 or more days past due or in foreclosure: 1,857,000

Month-over-month change: -59,000

Year-over-year change: -123,000

Top 5 States by Non-Current* Percentage
Mississippi:	7.48%
Louisiana:	7.24%
Alabama:	5.38%
West Virginia:	4.81%
Arkansas:	4.79%
Bottom 5 States by Non-Current* Percentage
Oregon:	2.02%
Montana:	1.94%
Idaho:	1.92%
Washington:	1.89%
Colorado:	1.80%
Top 5 States by 90+ Days Delinquent Percentage
Mississippi:	1.92%
Louisiana:	1.71%
Alabama:	1.42%
Arkansas:	1.21%
Georgia:	1.10%
Top 5 States by 12-Month Change in Non-Current* Percentage
New Hampshire:	-16.06%
Alaska:	-14.35%
Rhode Island:	-13.46%
District of Columbia:	-13.36%
Kentucky:	- 13.03%
Bottom 5 States by 12-Month Change in Non-Current* Percentage
South Dakota:	0.37%
Louisiana:	0.08%
Arizona:	-0.12%
Arkansas:	-0.83%
Tennessee:	-1.56%
*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Notes:
1) Totals are extrapolated based on ICE’s McDash loan-level database of mortgage assets.
2) All whole numbers are rounded to the nearest thousand, except foreclosure starts and sales, which are rounded to the nearest hundred.

The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at https://www.icemortgagetechnology.com/resources/data-reports by June 3, 2024.

For more information about gaining access to ICE’s loan-level database, please send an email to Mortgage.Monitor@bkfs.com.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines and automates industries to connect our customers to opportunity.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.

Category: Mortgage Technology

ICE-CORP

Source: Intercontinental Exchange

View source version on businesswire.com: https://www.businesswire.com/news/home/20240524599732/en/

ICE Media Contact

Mitch Cohen

mitch.cohen@bkfs.com

+1 704-890-8158

ICE Investor Contact:

Katia Gonzalez

katia.gonzalez@ice.com

+1 (678) 981-3882

Source: Intercontinental Exchange

FAQ

What was the national delinquency rate in April 2024?

The national delinquency rate in April 2024 was 3.09%.

How did serious delinquencies change in April 2024?

Serious delinquencies improved to their best level since August 2005, decreasing by 17,000 from March 2024 and by 84,000 year-over-year.

What was the change in foreclosure starts in April 2024?

Foreclosure starts declined by 0.8% from March 2024.

How did prepayment activity change in April 2024?

Prepayment activity rose to its highest level since August 2023, due to a seasonal upswing in home sales.

What challenges do consumers still face despite the improvement?

Consumers still face rate-driven affordability and refinance challenges.