US mortgage delinquencies declined in July as new defaults fell and more borrowers returned to current payment status, according to data from Intercontinental Exchange.

The national delinquency rate dropped 16 basis points during the month, with improvements across all stages of delinquency. The rate remains 12 basis points higher than a year ago but sits 46 basis points below pre-pandemic levels recorded in July 2019.

Serious delinquencies — loans more than 90 days past due but not yet in foreclosure — fell for a fifth consecutive month, though the total remains 87,000 above July 2019 levels.

New defaults have declined on an annual basis in four of the past five months. Some 102,000 borrowers became seriously delinquent in July, down 4 per cent year on year. Federal Housing Administration loans showed the greatest improvement, with new defaults falling 13 per cent compared with the same period last year.

The number of borrowers returning to current status rose to a nine-month high. Cures from serious delinquency increased 7 per cent to 64,100, the strongest reading since October 2025. Total cures across all delinquency stages climbed 12 per cent to 464,000, the highest since March.

Foreclosure activity continued to rise, however. Foreclosure starts reached 38,600, up 23 per cent year on year. Active foreclosure inventory increased 43 per cent annually and completed foreclosure sales rose 14 per cent, though volumes remain at 59 per cent of pre-pandemic levels.

Prepayment speeds slowed for a fourth consecutive month as mortgage rates remained elevated. Single-month mortality eased two basis points to 0.74 per cent, the lowest reading since January, though still seven basis points above year-ago levels.