New defaults on FHA-backed mortgages fell at their sharpest annual pace in more than four years in June, according to data released July 24, 2026, by ICE Mortgage Technology. The decline stands out as a rare bright spot in a mortgage-performance report that otherwise showed delinquencies edging higher, and it matters because FHA loans — used disproportionately by first-time and lower-credit-score borrowers — have been a focal point for housing economists watching for early signs of stress in the market.
The figures come from ICE’s monthly “First Look” report, a preliminary release of loan-level mortgage performance data that precedes the company’s fuller Mortgage Monitor report. First Look tracks national delinquency, foreclosure and prepayment trends drawn from ICE’s loan-level database of mortgage assets, giving lenders, investors and policymakers an early read on borrower performance each month. In recent months, ICE’s data had shown new default activity leveling off after a stretch in which FHA delinquencies drew scrutiny as a potential warning sign for lower-income and first-time-buyer segments of the market.
According to ICE, the national mortgage delinquency rate stood at 3.55% in June, up 5 basis points from May. The company reported 1,961,000 properties 30 or more days past due, while serious delinquencies — loans 90 or more days past due — totaled 570,000. Combined with active foreclosures, ICE put the total number of non-current mortgaged properties at 2,253,000.
The FHA figures were the headline of the release: new FHA defaults were down 15% year over year in June, which ICE said marked the largest annual decline in new FHA default activity in more than four years.
Foreclosure activity moved in the opposite direction. ICE reported that foreclosure starts rose to 43,000 in June, up nearly 40% from a year earlier and about 29% from May. Foreclosure sales climbed to 7,300, up more than 15% year over year, and the foreclosure pre-sale inventory rate reached 0.53% — a six-year high, per ICE’s data. Prepayment activity, measured by single-month mortality, was 0.77% in June, down 2 basis points from May but 12 basis points above the year-ago level.
What it means
The verified facts point to a mixed but not alarming picture: overall delinquencies and foreclosure activity ticked higher in June, even as the pace of new defaults among FHA borrowers — a segment considered more vulnerable to affordability pressure — improved markedly from a year earlier.
ICE’s own spokespeople offered their read on what the numbers signal. Andy Walden, ICE’s head of mortgage and housing market research, said in the release that “early-stage delinquencies remain subdued, and while serious delinquencies have reached pre-pandemic levels, new default activity has leveled off — a positive sign.” Bob Hart, president of ICE Mortgage Technology, attributed part of the resilience to homeowner equity, saying “high levels of homeowner equity continue to strengthen the market and help many distressed borrowers avoid foreclosure.”
Those comments are ICE’s own interpretation of its data, not RealtyWire’s independent analysis. Taken at face value, they suggest that home equity built up in recent years is giving financially stretched borrowers more room to sell, refinance or otherwise work out a loan before it reaches foreclosure — even as the foreclosure pipeline itself continues to grow off a low post-pandemic base. Readers tracking housing-market health should note that “pre-pandemic levels” for serious delinquency is a relatively low bar, since 2020 delinquency readings were unusually depressed by forbearance programs; the more notable data point is the deceleration in new FHA defaults specifically, which ICE frames as the standout trend of the month.
What to watch
The next test comes with ICE’s July data and its fuller Mortgage Monitor report, which will show whether the FHA improvement holds or was a one-month calendar effect. Analysts tracking the sector will also be watching foreclosure starts and the pre-sale inventory rate, both of which climbed to multi-year highs in June even as new defaults slowed — a combination that suggests loans already in distress are still working their way through the pipeline. Regional pockets of FHA and government-loan stress, along with prepayment trends tied to refinance activity, are likely to remain focal points as ICE and other housing-data providers assess whether June’s FHA improvement marks a turning point or a temporary pause.
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