The national mortgage delinquency rate fell by 16 basis points (bps) in December to 3.68% following November’s calendar related high, according to data from ICE Mortgage Technology. This marked a 3 bps dip from December 2024 and a 26 bps decline from the December 2019 pre-pandemic benchmark.
ICE noted that while earlier-stage delinquencies (30- and 60-day) improved in December, late-stage delinquencies (90+ day) increased by 30,000 to reach the highest level in nearly three years. Last month’s late-stage delinquencies were also 19,000 above the December 2024 level.
The single month mortality (SMM) rate, which tracks prepayments, rose by 8 bps in December to 0.91%, just 10 bps shy of the October 3.5-year high. ICE also noted December’s 40,000 foreclosure starts marks the third highest monthly volume in 2025, up 28% from the year before, while the foreclosure inventory was up by 47,000 (25%) year-over-year, and foreclosure sales have increased by 2,100 +41%) from last year’s levels. The number of loans in active foreclosure again hit its highest level since early 2023, driven by a spike in FHA foreclosures (up 59% year-over-year) and the resumption of VA activity following last year’s moratorium.
“December’s numbers show that lower interest rates drove refinance activity and prepayments to near multi-year highs,” said Andy Walden, head of mortgage and housing market research at ICE. “At the same time, there was a divergence in delinquency trends, with early-stage delinquencies improving and late-stage delinquencies continuing to rise. Foreclosure activity also increased, driven mainly by FHA and VA loans.”
