Early-Stage Delinquencies Inch Up Among Purchase Loans

Nov 04, 2019

Nearly one percent of originations in the first quarter of this year were delinquent six months post-origination, according to new data from Black Knight Inc.

The increase was mostly due to early-stage delinquencies among purchase loans and first-time homebuyers. An uptick in debt-to-income ratios rooted in home affordability pressures was pinpointed as one of the likely causes for this trend, although repeat purchasers faced the same affordability challenge and performance among that group has been steadier.

Black Knight Data & Analytics President Ben Graboske noted the one percent figure was “less than one-third of the 2000-2005 average of 2.95 percent, it represents a more than 60 percent increase over the last two years and is the highest it’s been since late 2010. Early-stage GSE delinquencies currently stand at 0.6 percent, up two tenths of a percentage point over the past 24 months, but still 40 percent below the market average and 60 percent below their own 2000-2005 average of 1.3 percent.”

Graboske added that while purchase loan performance has seen some softening, “it hasn’t been to the extent seen among entry-level buyers. All in all, first-time homebuyer originations combined between the GSEs and GNMA increased by nearly 50 percent between 2014 and 2018. However, whereas first-time homebuyers represent just over 40 percent of GSE purchase loans, they make up 70 percent of the GNMA purchase market.”

About the author

Phil Hall

Link copied

Published

Nov 04, 2019

Analysis and Data

Teensy Nudge Up For 30-Year Fixed-Rate Mortgage Rates

30-year FRM stays essentially flat following seven weeks of downward drift

The average 30-year fixed-rate mortgage (FRM) rate rose ever so slightly to 6.65% as of the week ending March 13, an increase from 6.63% the prior week, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS). Sam Khater, chief economist at the company, note...

Regulation and Compliance

New FHFA Director To Prioritize Efficiency Over GSE Re-Privatization

Industry groups applaud Bill Pulte’s confirmation as FHFA Director, pledge to work on U.S. housing affordability ‘crisis’

Now that the U.S. Senate has confirmed Bill Pulte as Director of the Federal Housing Finance Agency (FHFA), reports have it that Pulte’s top priority will not be removing Fannie Mae and Freddie Mac from government conservatorship. Rather, he’ll focus on rooting out any f...