ICE Mortgage Performance Report: Delinquencies Hit 3-Year High at 3.74%, Prepayments Fall by 25% Due to Rising Rates
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, has released its “first look” at November 2024 month-end mortgage performance statistics. These insights, derived from ICE’s comprehensive loan-level database, cover a significant portion of the national mortgage market and offer a snapshot of key metrics impacting the U.S. housing and mortgage sectors.
Key Metrics and Trends
As of November 30, 2024, the total U.S. loan delinquency rate—which includes loans that are 30 or more days past due but not yet in foreclosure—stood at 3.74%. This marks an 8.38% increase month-over-month and a 10.46% increase year-over-year. The rise in delinquencies is significant, indicating that a growing number of borrowers are struggling to make timely payments, likely influenced by the ongoing challenges posed by higher interest rates.
Despite the increase in delinquencies, foreclosure activity showed a downward trend. The foreclosure pre-sale inventory rate, which measures the percentage of loans in the foreclosure process but not yet completed, decreased to 0.34%. This is a 2.09% drop from the previous Delinquencies month and a substantial 15.96% decrease from the same time last year.
Foreclosure Starts and Sales
The total number of foreclosure starts—the initiation of the foreclosure process—dropped significantly in November, with a 29.15% decrease month-over-month, bringing the figure to 21,000 starts. On a year-over-year basis, the decline was nearly identical at 29.22%. Similarly, foreclosure sales, which refer to the number of homes actually sold through foreclosure, also fell by 8.43% from the previous month and 17.65% from November 2023, totaling 5,300 sales.
Prepayment Rate Declines
Prepayments, which occur when borrowers pay off their loans early, have seen a sharp decline. The monthly prepayment rate (SMM) dropped to 0.63%, marking a 25.02% decrease month-over-month. However, on a year-over-year basis, prepayments surged by 71.20%, reflecting the impact of a lower-rate environment from the previous year, before recent rate hikes began to curtail refinancing and early loan payoffs.
Delinquency and Foreclosure Trends
The number of properties that are 30 or more days past due but not yet in foreclosure increased by 159,000 month-over-month, totaling 2,027,000 properties. On a year-over-year basis, this number grew by 224,000 properties. Meanwhile, the number of properties that are 90 or more days past due but not in foreclosure rose by 32,000 month-over-month, bringing the total to 512,000 properties. Year-over-year, this figure increased by 53,000 properties, further indicating a persistent rise in late payments.
Notably, the foreclosure pre-sale inventory also saw a decrease of 4,000 properties from the previous month, with a total of 185,000 properties in the foreclosure pipeline. Compared to November 2023, this represents a 31,000 property decline.
State-Level Mortgage Performance Insights
A breakdown of mortgage performance by state reveals significant regional disparities. The states with the highest percentage of non-current loans—a term that combines both delinquencies and foreclosures as a percentage of active loans—are led by Louisiana at 8.60%, followed by Mississippi Delinquencies at 8.48% and Alabama at 6.23%. These states are facing more severe challenges in terms of mortgage performance.
On the other hand, the states with the lowest non-current percentages are Washington at 2.16%, Idaho at 2.19%, and Colorado at 2.21%, indicating stronger mortgage performance and fewer delinquencies and foreclosures.
In terms of 90+ days delinquent percentages, Mississippi and Louisiana top the list with 2.30% and 2.26%, respectively, while Georgia (1.35%) and Arkansas (1.42%) also report high delinquency rates.
Year-over-Year Changes in Non-Current Percentage
Several states have experienced notable changes in the percentage of non-current loans over the past 12 months. Hawaii has seen a 9.59% decrease, followed by New York (-5.86%) and Massachusetts (-2.24%). These declines suggest improving mortgage conditions in those states.
In contrast, states such as Florida (+28.13%), North Carolina (+20.39%), and South Carolina (+17.59%) have witnessed significant increases in non-current percentages, suggesting heightened challenges in these regions, possibly due to affordability issues or other local factors.
Looking Ahead
As of now, ICE Mortgage Monitor does not plan to release a report in January 2025, but previous reports remain accessible on their website. The next ICE Mortgage Monitor is scheduled to be published on February 3, 2025.
These trends are critical for industry stakeholders, including Delinquencies mortgage lenders, servicers, and investors, as they offer vital insights into emerging risks and opportunities in the mortgage market. For further access to ICE’s extensive loan-level database, interested parties are encouraged to contact [email protected].
