Mortgage prepayments hit 3.5-year high as rates fall in October

"Softening mortgage rates expanded the pool of refinance candidates in October, pushing prepayments to their highest level in three and a half years, said Andy Walden, head of mortgage and housing market research at ICE. This trend was largely driven by people who purchased homes at elevated rates in recent years seizing the opportunity to lower their monthly payments. Despite the increase in prepayments, overall mortgage performance remained solid."

"The national delinquency rate loans 30 or more days past due but not in foreclosure fell 7 basis points from September to 3.34%. That's 11 basis points lower than a year ago and 53 basis points below the October 2019 level, prior to the COVID-19 pandemic. Both early-stage (30-day) and serious (90-day-plus) delinquencies improved in October, according to the data released Tuesday."

"Foreclosure activity also declined month over month as total U.S. foreclosure starts fell 9.84% from September to 38,000. But starts remain elevated compared to last year, rising 32.4% year over year. The number of properties in foreclosure pre-sale inventory rose by 4,000 from September to 226,000 up 37,000 from October 2024. Federal Housing Administration (FHA) foreclosures increased by 50% year over year, the report shows."

Softening mortgage rates in October expanded the pool of refinance candidates and pushed prepayments to their highest level in three and a half years, driven by recent buyers seeking lower monthly payments. Overall mortgage performance remained solid as the national delinquency rate for loans 30 or more days past due fell 7 basis points to 3.34%, 11 basis points lower than a year earlier and 53 basis points below October 2019. Early-stage and serious delinquencies improved. Foreclosure starts declined month over month to 38,000 but rose 32.4% year over year. Foreclosure pre-sale inventory increased to 226,000, with FHA foreclosures up 50% year over year and VA foreclosures resuming after a moratorium; levels remain historically low.

Read at www.housingwire.com