Mortgage performance improved in March as seasonal patterns helped push delinquency rates lower, while a surge in prepayments signaled renewed borrower activity amid a more favorable rate environment.

New data released by Intercontinental Exchange showed that the national delinquency rate fell by 37 basis points to 3.35% during the month. The decline aligns with typical springtime improvements, though the rate remains modestly higher than a year ago.

At the same time, prepayment activity accelerated significantly. The monthly prepayment rate climbed to 1.06%, marking its highest level in nearly four years and standing 78% above March 2025 levels. The increase reflects heightened refinancing and home sale activity as borrowers respond to lower rates.