The national mortgage delinquency rate rose 15 basis points to 3.50% in May, according to data from Intercontinental Exchange Inc. (NYSE: ICE). However, that uptick was attributed to a calendar anomaly.
Andy Walden, head of mortgage and housing market research at ICE, explained, “While the headline increase in delinquencies may draw attention, the underlying performance picture is stable as delinquencies remain below January 2020 levels. The rise in early-stage delinquencies and the month-over-month decline in cures were largely driven by the Sunday month-end, which causes many mortgage payments to be processed the following business day. The more important trend to watch remains the continued growth in serious delinquencies and active foreclosures, particularly among FHA loans.”
Overall delinquencies rose 4.5% month over month, which ICE said was typical of historical Sunday month-end patterns. Serious delinquencies (90-plus days past due, but not in foreclosure) in May held steady from April but were up 111,000 year-over-year for the largest annual increase since 2020.
Foreclosure starts fell 9% from April but were 19% above year-ago levels. Active foreclosure inventory reached 280,000 loans, up 34% annually and the highest level in six years, though the foreclosure rate remained below pre-pandemic levels. The number of loans that are seriously delinquent or in active foreclosure increased by 185,000 from a year ago, marking the largest year-over-year increase since the pandemic-era unemployment spike in 2020.
Loans curing from serious delinquency declined 6% month over month in May, with cure volumes below late 2025 levels. FHA cures lagged behind the broader market performance. Single-month mortality (SMM) fell 15% from April’s 0.93% to 0.79% — a four-month low — as mortgage rates rose. May’s SMM remained 8 bps above year-ago levels.
“Overall mortgage performance remains healthy, yet the level of serious delinquencies and active foreclosures highlights the importance of reaching borrowers early,” said Bob Hart, president of mortgage technology at ICE.
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