U.S. mortgage delinquencies jumped sharply in November, reaching their highest level in more than four years, according to ICE Mortgage Technology’s latest First Look report, released on Tuesday.
The national delinquency rate rose to 3.85% in November, up 50 basis points from October, as the number of past-due mortgages increased by 275,000 to about 2.3 million.
ICE said that the increase largely reflects calendar effects rather than a broad deterioration in borrower performance. Similar calendar-driven increases occurred in 2014, 2008 and 2003, each of which produced larger November delinquency jumps than this year’s increase.
“While the topline delinquency numbers show a sharp increase, we’ve seen comparable spikes in prior years when November ended on a Sunday and scheduled payments didn’t post until early December,” said Andy Walden, ICE’s head of mortgage and housing market research. “Overall performance was in line with what historical patterns would suggest. That said, December data will be important to watch to confirm how quickly borrowers recover from this temporary uptick.”
Newly delinquent borrowers was notable
The inflow of newly delinquent borrowers was notable, with 609,000 homeowners who were current in October falling behind on payments in November, the largest single-month increase since May 2020.
Transitions into deeper delinquency categories, including loans rolling from 30 to 60 days and from 60 to 90 days past due, also rose sharply.
Prepayment activity retreated in November after reaching a three-and-a-half-year high in October. The monthly prepayment rate decreased by nearly 18% from the prior month to 0.83%, although it remained more than 30% higher than a year earlier.
Foreclosure activity was mixed. Seasonal and calendar factors contributed to a decline in foreclosure starts and sales on a month-over-month basis, with foreclosure starts falling 31.5% to 26,000 and foreclosure sales down nearly 14% to 6,700.
But despite the monthly drop, foreclosure starts, sales and active foreclosure inventory all remained more than 20% higher than a year earlier.
As of Nov. 30, 226,000 properties were in foreclosure pre-sale inventory, unchanged from October but up 41,000 from a year earlier. The total number of properties that were at least 30 days delinquent or in foreclosure increased to 2.34 million, a rise of 275,000 from October.
Delinquency rates varied widely by state. Louisiana and Mississippi posted the highest share of non-current loans, both near 8.75%, followed by Alabama, Arkansas and Indiana. California, Washington and several Mountain West states reported the lowest non-current rates, all below 2.5%.
Mississippi, Louisiana and Alabama also led the nation in loans that were at least 90 days delinquent. Meanwhile, Florida, South Carolina and Hawaii recorded the largest year-over-year improvements in non-current rates, while Maryland, Utah and the District of Columbia saw the steepest annual increases.