Mortgage Delinquency Rate Up During August

The national mortgage delinquency rate rose by 16 basis points (bps) in August to 3.43%, a 10-bps year-over-year upswing.

According to data from ICE Mortgage Technology, August’s rise follows delinquency rate declines from June and July. FHA loans recorded the largest annual increases, with the non-current rate (delinquencies including foreclosures) up by 86 bps to 12.0% in August, while the non-current rates for VA, GSE, and portfolio-held mortgages remained effectively compared to one year before.

However, an anomaly in the August calendar might have played a role in the month’s delinquency data.

“The rise in the national delinquency rate for August is best understood in the context of how the calendar can impact payment processing,” said Andy Walden, head of mortgage and housing market research at ICE. “Most of the uptick in the national delinquency rate can be attributed to delayed processing of end-of-month payments, as August closed on a Sunday this year. This calendar-driven effect is consistent with what we observed in prior years, so the increase should be considered a temporary adjustment rather than a shift in underlying borrower health.”

ICE also identified Louisiana as the state with the highest non-current percentage (7.91%), followed by Mississippi (7.82%), Alabama (5.79%), Arkansas (5.49%), and Indiana (5.48%). Idaho had the lowest non-current percentage at 2.03%.