Mortgage Performance: FHA Loans Drive Annual Decline in New Default Activity
Intercontinental Exchange, Inc. has published the June 2026 ICE First Look report, which examines trends in mortgage delinquency, foreclosure, and prepayment. The analysis revealed that early-stage delinquencies continued to be low as new default activity decreased. Significantly, new FHA defaults experienced their most substantial annual decline in over four years.
Key Findings from the June 2026 ICE First Look:
- Delinquencies experienced a modest increase, yet they remain below pre-pandemic figures: The national delinquency rate increased by 5 basis points (bps) to 3.55% in June, which is approximately half of the usual seasonal rise. This rate is still 60 bps lower than the June 2019 pre-pandemic benchmark of 4.16%.
- Late-stage delinquencies have decreased to a six-month low: Serious delinquencies (those 90 or more days past due but not in foreclosure) dropped to 570,000, continuing the seasonal improvement that commenced in March.
- New default activity has diminished: New default volumes have stabilized in recent months, with new FHA defaults decreasing by 15% year over year in June, marking the largest annual decline in over four years.
- Roll rates have improved across the early stages of delinquency: The number of borrowers falling into 30- and 60-day delinquency decreased in June, both on a monthly and annual basis.
- Foreclosure activity is gradually trending upward: The percentage of mortgages in active foreclosure reached 0.53% in June, the highest level in six years, as foreclosure activity continued to normalize. Foreclosure starts reached a six-year peak, and foreclosure sales increased by 16% compared to a year ago, although they remain 46% below pre-pandemic levels.
- Prepayment speeds have slowed: Single-month mortality (SMM) decreased by 2 bps to 0.77%, a five-month low, as mortgage rates stayed elevated, although June’s SMM was still 12 bps higher than the levels from a year ago.
“Overall performance remained strong in June,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “Early-stage delinquencies remain subdued, and while serious delinquencies including foreclosures have reached pre-pandemic levels, new default activity has leveled off in recent months—a positive sign.”
Share of Seriously Delinquent Mortgage Loans/in Foreclosure (30 or more days past due):
| Top five states by *non-current percentage: | |
| Mississippi: | 8.41% |
| Louisiana: | 8.37% |
| Indiana: | 6.30% |
| Alabama: | 6.24% |
| Arkansas: | 5.69% |
“New FHA defaults, which have been a focal point of market attention, were down 15% year-over-year in June. These trends are encouraging, even as the market continues to warrant close monitoring,” Walden said.
| Bottom five states by *non-current percentage: | |
| California: | 2.40% |
| Hawaii: | 2.35% |
| Washington: | 2.24% |
| Montana: | 2.23% |
| Idaho: | 2.09% |
“High levels of homeowner equity continue to strengthen the market and help many distressed borrowers avoid foreclosure,” said Bob Hart, President of Mortgage Technology at ICE. “Still, early foreclosure activity bears watching, making timely data and proven servicing tools more important than ever. ICE’s McDash loan-level performance data is relied upon by many of the industry’s leading participants to monitor portfolio performance and model default risk, while our Loss Mitigation solution helps servicers improve borrower outcomes by executing workout strategies more efficiently while supporting compliance.”
| Top five states by 90+ days delinquent percentage: | |
| Mississippi: | 2.53% |
| Louisiana: | 2.29% |
| Alabama: | 1.84% |
| Georgia: | 1.62% |
| Indiana: | 1.61% |
Note: *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Additional Highlights (June 30, 2026):
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 3.55%
- Month-over-month (MoM) change: 1.41%
- Year-over-year (YoY) change: 5.96%
Total U.S. foreclosure pre-sale inventory rate: 0.53%
- MoM change: 3.98%
- YoY change: 39.26%
Total U.S. foreclosure starts: 43,000
- MoM change: 29.03%
- YoY change: 39.69%
Monthly prepayment rate (SMM): 0.77%
- MoM change: -2.41%
- YoY change: 17.71%
Foreclosure sales: 7,300
- MoM change: 3.64%
- YoY change: 15.54%
Number of properties that are 30 or more days past due, but not in foreclosure: 1,961,000
- MoM change: 29,000
- YoY change: 127,000
Number of properties that are 90 or more days past due, but not in foreclosure: 570,000
- MoM change: -6,000
- YoY change: 104,000
Number of properties in foreclosure pre-sale inventory: 292,000
- MoM change: 11,000
- YoY change: 84,000
Number of properties that are 30 or more days past due or in foreclosure: 2,253,000
- MoM change: 40,000
- YoY change: 211,000
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