The exchange for the debt economy
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The national delinquency rate cooled last month, while foreclosure activity hit its highest level since early 2020, a new industry report shows.
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Delinquencies fell by three basis points to 3.65% in January, 15 basis points below prepandemic levels, but foreclosure starts caught up with its 2020 numbers last month, totaling 42,000, according to Intercontinental Exchange’s monthly First Look report. Both recorded near-5% increases year over year.
“Mortgage performance held steady to start the year, with fewer early-stage delinquencies helping bring the national delinquency rate down,” said Andy Walden, head of mortgage and housing market research at ICE, in a press release Thursday. “At the same time, late-stage delinquencies and foreclosure volumes are both trending higher than they were a year ago. The data points to a market that remains resilient overall with most borrowers performing well while a subset faces increased payment pressure.”
The number of borrowers 30 or 60 days delinquent fell by 54,000 month over month, but there were over 850,000 borrowers 90 or more days late on their mortgage payments or in active foreclosure. That was 104,000 more from the same time last year and the largest number since July 2022.
Foreclosure sales also rose 13.38% month over month and 27.87% on an annual basis to 8,100, the report found.
Despite mortgage rates continuing to fall in January, prepayment speeds decreased after a surge in December. The single month mortality rate, which tracks prepayments, fell 19 basis points to 0.72%, the report said.
Regionally, Louisiana and Mississippi were home to the most delinquent homeowners, leading all states with 8.64% and 8.53% delinquency rates, respectively. Mississippi (2.53%) and Losuiana (2.42%) also posted the highest percentage of properties 90 or more days delinquent.
Idaho, Montana and Washington were the states with the lowest delinquency rates at 2.08%, 2.16% and 2.17%, respectively.
VantageScore reported a spike delinquencies
According to the latest addition of CreditGauge from VantageScore, mortgage delinquencies rose across all stages, including a 1.14% month over month increase in early-stage delinquencies.
“The broad-based rise in early-stage credit delinquencies across VantageScore credit tiers underscores persistent macroeconomic pressures, particularly for more vulnerable borrowers,” said Susan Fahy, executive vice president and chief digital, data and technology officer at VantageScore, in a press release Thursday. “Sustained cost pressures and interest rates may leave some consumers increasingly exposed to future economic shocks.”
The report also found credit originations grew for personal loans (0.29%), auto loans (0.10%) and mortgages (0.03%), while credit cards saw a slight 0.09% decline.
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