Mortgage Delinquency Rates Rise In September 2023, Breaking Prolonged Stability

Intercontinental Exchange, Inc. data indicates an upward trend in mortgage delinquency rates for September 2023. This follows a prolonged period of robust mortgage performance.

The national delinquency rate for September reached 3.29%, marking a 12 basis points (BPS) rise from August and a 13 BPS year-over-year increase. This shift represents the most significant, and only the second, annual uptick in the past two-and-a-half years. However, it remains 71 BPS below the pre-pandemic levels of September 2019.

The report found an increase in early-stage delinquencies: Loans 30 days past due rose by approximately 48.8K (+5.1%), marking four consecutive monthly rises. Meanwhile, 60-day delinquencies saw an extension in their streak of increases, with a boost of 8.7K (+3.0%) over six months.

Serious delinquencies, referring to loans 90+ days overdue, climbed by 7K to 455K. Nevertheless, they are still 6.7% below the rates of September 2019.

On a brighter note, the number of loans in active foreclosure plummeted to its lowest since March 2022, reaching 214,000 in September. This number is a significant 25% below the levels seen before the pandemic in 2019.

There was a decline in foreclosure initiations by 20.4% in September, reducing the number to 25.4K. Completed sales also experienced an 8% drop from the previous month.

Prepayment activities gauged as single-month mortality dwindled to 0.45%, influenced by changing seasonal home-buying patterns and interest rates surpassing 7%. This rate is a decline of 26% year over year.