ICE Mortgage Monitor shows serious delinquencies up 25% in four-month span

Mortgage delinquency rates are increasing modestly from historic low points as declining cure rates push more borrowers into serious distress, even as affordability has improved on a year-over-year basis, according to Intercontinental Exchange (ICE)’s April 2026 Mortgage Monitor.

The report, which draws on ICE’s McDash loan-level database and home price index, shows the national delinquency rate reached 3.72% in February, up 7 basis points from January. This was driven by seasonal increases in both early- and late-stage delinquencies. The rate is up 20 bps from a year earlier but remains slightly below pre-pandemic levels.

The number of borrowers with a single payment past due increased by 43,000, while loans at least 90 days past due but not in foreclosure increased by 17,000.

More notably, serious distress is climbing. About 878,000 loans are now either 90-plus day past due or in foreclosure. That’s up 25% — or roughly 175,000 loans — over the past four months to mark the highest level since mid-2018 outside of pandemic-era disruptions.

Government-backed loans are driving much of that increase. Federal Housing Administration (FHA) mortgages account for more than 80% of the recent rise, with seriously delinquent FHA loan volumes up more than 40% over that period.

While default activity has been trending gradually higher, ICE attributed the recent jump in serious delinquencies more to weakening recoveries than to a surge in new defaults.

Cure rates, or the share of delinquent borrowers who return to current status, have fallen more than 40% since the third quarter of 2025 and roughly 70% among the FHA loan population, marking a return to pre-pandemic norms.

At the same time, the 90-day default rate is up 13% from two years ago, indicating a gradual upward trend in borrower distress.

Foreclosure activity remains below pre-pandemic levels but is rising on an annual basis. February saw 35,000 foreclosure starts, down 16% from January but up 6% from a year earlier and still 19% below 2019 levels.

Forbearance trends may be contributing to the shift. The share of seriously delinquent loans in forbearance rose late last year and has begun to ease as borrowers reach the end of their initial three-month plans. How these borrowers perform as they exit forbearance will be a key indicator of default risk through 2026, ICE said.

Rates and affordability

Mortgage rates have been volatile in recent weeks amid geopolitical and inflation concerns.

The 30-year conforming rate fell below 6% in late February for the first time since early 2023 but has since climbed roughly 40 basis points, reducing refinance incentives and trimming some affordability gains from early 2026.

The number of borrowers with a financial incentive to refinance has dropped 60% from recent peaks, reversing gains seen in late 2025 and early 2026. Even so, affordability has improved compared with a year ago. At a 6.35% rate, the monthly principal and interest payment on an average-priced home is about $2,169, up 4% from February but down 3% from March 2025.

That payment now represents 28.9% of median household income, down from 30.8% a year earlier but still well above long-run norms.

Across markets, affordability has improved in 99 of the 100 largest U.S. metros over the past year. New Haven, Connecticut, is the lone exception, requiring 0.2 percentage points more of household income than in March 2025.

Meanwhile, many markets in California and other high-cost coastal regions remain significantly stretched relative to historical averages.

Borrowers remain highly cost-sensitive. ICE survey data show 75% rank securing the lowest interest rate as their top priority, yet roughly 80% consider only one or two lenders when shopping for a lender.

Inventory and housing supply

Housing inventory continues to recover but remains below pre-pandemic levels, with notable regional divides. Active listings were up 8% year over year in February, the slowest growth in more than two years, and still about 11% below 2017–2019 averages.

Supply remains particularly constrained in the Northeast. Markets like Hartford and Bridgeport, Connecticut, continue to face inventory deficits of roughly 78% compared with pre-pandemic norms.

New listings are also limited, running about 16% below historical averages. Survey data show 62% of homeowners have no plans to sell anytime soon, with older homeowners especially unlikely to list.

ICE data suggest inventory is likely to recover gradually rather than surge at a specific mortgage rate threshold, as homeowners with below-market rates remain reluctant to move.

Home price growth, meanwhile, remains subdued but is showing early signs of stabilization.

Annual home price growth measured 0.4% in early March, reflecting soft conditions over the past year. On a monthly basis, however, prices have posted their strongest gains in nearly a year, with most markets showing some degree of firming.

The Midwest and Northeast are seeing stronger price appreciation, while parts of the South and West continue to experience softer or declining prices.

Single-family homes continue to outperform condominiums, with prices up 0.74% year over year compared with a 2.1% decline for condos.

Looking ahead, ICE said borrower behavior during the spring homebuying season will be critical in determining whether recent price stabilization can be sustained.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication. The system helps convert company announcements and industry data into HousingWire-style news coverage.