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.”