Mortgage delinquencies fell across all stages in July, offering fresh evidence that the housing market may be stabilizing after months of elevated stress. The national delinquency rate dropped 16 basis points to 3.39%, according to data released this week by Intercontinental Exchange (ICE), the financial technology firm whose First Look report tracks the majority of U.S. mortgages.
The improvement marks the fifth consecutive month that serious delinquencies—loans 90 or more days past due but not yet in foreclosure—have declined. Cure activity, the number of borrowers catching up on missed payments, also strengthened in July, reaching the highest level since March. Combined, the trends suggest that while the mortgage market remains above pre-pandemic stress levels, the trajectory may be shifting.
For homeowners who have struggled with payments over the past year, the data offers a cautiously optimistic signal. For buyers watching affordability and market conditions, it underscores that most borrowers are managing their obligations even as foreclosure activity continues to normalize from pandemic-era lows.
The numbers
Delinquencies improved at every stage
July saw declines in early, mid, and late-stage delinquencies for the first time in months.
The national mortgage delinquency rate fell from 3.55% in June to 3.39% in July—a 16-basis-point drop that ICE described as improvement “at every delinquency stage.” The rate remains 12 basis points higher than it was in July 2025, but sits 46 basis points below the July 2019 pre-pandemic benchmark, according to ICE Mortgage Technology’s official data portal.
Serious delinquencies—the subset of loans 90 or more days past due but not in active foreclosure—declined by 7,000 to 563,000 loans. That’s the fifth straight month of decline, though the total remains 97,000 loans above July 2025 levels and 87,000 above July 2019. Among borrowers entering serious delinquency in July, 102,000 did so, down 4% year over year.
“July’s data provided another indication that mortgage performance may be finding firmer footing beneath the surface,” said Andy Walden, head of mortgage and housing market research at ICE. He noted that new default activity has eased from last year’s levels in four of the past five months, and cure activity is improving—a combination that points to stabilization rather than deterioration.
Key figures from July 2026
3.39% — National delinquency rate (down from 3.55% in June)
563,000 — Serious delinquencies (90+ days past due, not in foreclosure)
64,100 — Serious delinquency cures in July, up 7% from June
464,000 — Total cures at all stages, up 12% and the highest since March
38,600 — Foreclosure starts in July, up 23% year over year
Context
Cures climbed as fewer borrowers fell behind
More homeowners are catching up on missed payments, while fewer are becoming newly delinquent.
The number of borrowers who returned from serious delinquency to good standing—known as “cures”—rose 7% in July to 64,100, the strongest month for serious-delinquency cures since October 2025. Total cures at all stages of the delinquency process climbed 12% to 464,000, the highest number since March.
At the same time, new default inflows have been trending lower. In four of the past five months, fewer borrowers became newly delinquent compared to the same period a year earlier. That combination—more borrowers catching up and fewer falling behind—is what ICE analysts point to as evidence of a market finding more stable ground.
The improvement is not uniform across loan types. FHA loans, which insure mortgages for lower-income and first-time buyers, continue to show elevated stress. While new FHA defaults posted their largest annual decline in more than four years in June, FHA serious delinquencies remain concentrated and significantly higher than conventional loans. The Mortgage Bankers Association reported in August that FHA delinquencies were about 900 basis points higher than conventional loan delinquencies in the first quarter of 2026.
Foreclosure activity, meanwhile, continues to normalize. Foreclosure starts reached 38,600 in July, a 23% increase year over year, though down 8.3% from June. Active foreclosure inventory climbed 1.3% month over month and 43% annually. Foreclosure sales rose 8.4% from June and 14.2% from last year. These increases reflect the unwinding of pandemic-era moratoriums and loss-mitigation programs, rather than a sudden surge in distress.
What it means
A stabilizing market, but stress remains
The data suggests the worst may be behind us, but foreclosure pipelines are still elevated.
For prospective buyers, the July data offers reassurance that the mortgage market is not spiraling into widespread distress. Most borrowers are managing their payments, and the rate of new defaults is declining. That stability supports home prices and reduces the likelihood of a wave of distressed sales flooding the market.
For current homeowners, especially those who have fallen behind, the rise in cure activity is a positive sign. More borrowers are finding ways to catch up—whether through loan modifications, forbearance plans, or other loss-mitigation options. If you’re struggling with payments, contact your servicer as soon as possible to discuss options before a missed payment becomes a foreclosure.
State-level variation is significant. Louisiana led all states with an 8.2% delinquency rate in July, while Mississippi had the highest share of loans 90 or more days past due at 2.53%. Idaho, Montana, and Washington all posted delinquency rates below 2.3%. If you’re buying in a state with higher delinquency rates, it may signal local economic stress or job-market weakness worth investigating. Check your state’s specific programs and conditions before committing to a purchase.
Bob Hart, president of mortgage technology at ICE, cautioned that “the concentration of stress in FHA loans and rising foreclosure inventory means servicers can’t afford to lose visibility into their portfolios.” For buyers considering FHA financing, the data underscores the importance of a solid financial cushion and realistic budgeting, especially if you’re stretching to afford a home.
What to do if you’re behind on payments
Contact your mortgage servicer immediately. Federal and state programs may offer forbearance, loan modifications, or partial claims that can prevent foreclosure. The sooner you act, the more options you’ll have. Many state housing finance agencies also offer emergency assistance for homeowners facing temporary hardship.
Quick answers
Mortgage delinquencies: common questions
What does a falling delinquency rate mean for home buyers?
A falling delinquency rate generally signals a stable housing market. It means fewer homeowners are struggling to make payments, which reduces the likelihood of distressed sales and helps support home prices. For buyers, it’s a sign that the market is functioning normally and that most borrowers are managing their obligations.
Are mortgage delinquencies still higher than before the pandemic?
It depends on the comparison. The July 2026 delinquency rate of 3.39% is 46 basis points below the July 2019 pre-pandemic level. However, it’s 12 basis points higher than July 2025. Serious delinquencies (90+ days past due) remain elevated compared to both 2019 and 2025, largely due to stress in FHA loans.
Why are FHA delinquencies so much higher than conventional loans?
FHA loans are designed for borrowers with lower incomes and smaller down payments, often first-time buyers. These borrowers typically have less financial cushion to weather job loss, medical expenses, or other disruptions. Changes to FHA loss-mitigation guidelines in late 2025 also contributed to a temporary spike in reported delinquencies as loans moved through the foreclosure pipeline.
What is a “cure” in mortgage terms?
A cure occurs when a borrower who was delinquent (missed one or more payments) catches up and returns to good standing. Cures can happen through a lump-sum payment, a repayment plan, a loan modification, or other arrangements with the servicer. Rising cure rates are a positive sign that borrowers are finding ways to avoid foreclosure.
Should I worry about foreclosures flooding the market?
Probably not. While foreclosure activity is rising from pandemic-era lows, it remains well below pre-pandemic levels. Foreclosure sales in July were still 46% below 2019 levels, and the increases reflect a return to normal processing rather than a surge in new distress. Most borrowers have significant equity in their homes, which gives them options to sell or refinance before foreclosure.
How can I check delinquency rates in my state or county?
ICE publishes state-level data in its monthly First Look report, available at mortgagetech.ice.com. The Consumer Financial Protection Bureau also maintains an interactive tool at consumerfinance.gov that shows delinquency rates by state, metro area, and county. These resources can help you understand local market conditions before buying.