Jul 1, 2017 - peaks; coastal northeast home ... San Francisco, CA · 24% · 1.4% ... peak. » Seattle has the highest HPA
JULY 2017 REPORT
MORTGAGE MONITOR
JULY 2017
MORTGAGE MONITOR
CONTENTS 1 | JULY FIRST LOOK RELEASE 2 | JULY MARKET OBSERVATIONS 3 |
HOME PRICE TRENDS
4 |
Q2 2017 MORTGAGE ORIGINATIONS
5 |
APPENDIX
6 |
DISCLOSURES
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JULY 2017
MORTGAGE MONITOR
JULY 2017 OVERVIEW
Each month, the Black Knight Mortgage Monitor looks at a variety of issues related to the mortgage and financial services industry. This month, as always, we begin with a look at some of the high-level mortgage performance statistics reported in the company’s most recent First Look report, with an update on the latest milestones reached in terms of the foreclosure backlog, as well as delinquency and prepayment trends. Next, we check in on some key market trends for July, taking a closer look at the month’s foreclosure start metrics, while providing an update on the population of potential refinance candidates. Additionally, we assess the impact of the recently announced extension of the federal government’s Home Affordable Refinance Program (HARP) through the end of 2018 as well as the potential effects of Hurricane Harvey on the mortgage market. Then, leveraging data from the Black Knight Home Price Index (HPI), we look at early-2017 home price appreciation, providing a geographically granular view of the landscape and which markets are trending up or down. In addition, we examine areas where condominium appreciation is outpacing that of single family residences (SFRs). Finally, with Q2 2107 origination data in, we examine second quarter mortgage origination volumes and changes in the makeup of that market. In the process, we also look at how much the purchase lending market may still be hampered by more stringent credit requirements enacted in the wake of the Great Recession. In producing the Mortgage Monitor, the Data & Analytics division of Black Knight Financial Services aggregates, analyzes and reports upon the most recently available mortgage performance data from the company’s McDash loan-level database. For more information on McDash or Black Knight Data & Analytics in general, please call 844-474-2537 or email
[email protected]. Stay connected with Black Knight Data & Analytics
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JULY 2017
MORTGAGE MONITOR
JULY FIRST LOOK RELEASE
Here we have an overview of findings from Black Knight’s ‘First Look’ at July mortgage performance data. This information has been compiled from Black Knight’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.
Jul-17
Month-overmonth change
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure):
3.90%
2.82%
-13.49%
Total U.S. foreclosure pre-sale inventory rate:
0.78%
-2.96%
-27.96%
Total U.S. foreclosure starts:
53,300
-5.66%
-13.05%
Monthly Prepayment Rate (SMM):
1.01%
-9.59%
-19.94%
Foreclosure Sales as % of 90+:
1.96%
-10.85%
-1.48%
Number of properties that are 30 or more days past due, but not in foreclosure: 1,986,000
Year-over-year change
54,000
-300,000
Number of properties that are 90 or more days past due, but not in foreclosure:
555,000
0
-140,000
Number of properties in foreclosure pre-sale inventory:
398,000
-12,000
-152,000
42,000
-452,000
Number of properties that are 30 or more days past due or in foreclosure: 2,384,000
12 Month Trend
»»
The national delinquency rate rose by 2.8 percent in July, on par with expected seasonal activity, though 90-day delinquencies stayed level from one month ago
»»
July’s 53,300 foreclosure starts mark the second lowest (next to April 2017) monthly volume since the start of 2005
»»
At just 21,000, first time foreclosure starts were the lowest since the turn of the century
»»
Following monthly gains in May and June, prepayment activity fell by nearly 10 percent in July and 20 percent below last year
»»
The monthly declines in prepayment activity were seen in a relatively uniform fashion across investor, credit and vintage bands
»»
Foreclosure inventory fell by 12,000 in July, bringing the total below 400,000 for the first time since February 2007
»»
Active foreclosure inventory has declined by 28 percent (more than 150,000) over the past 12 months
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JULY 2017
MORTGAGE MONITOR
Here, we take a closer look at July’s foreclosure start metrics, along with an update on refinance candidates, the impact of the recently announced extension of the Home Affordable Refinance Program (HARP) and the potential impact of Hurricane Harvey on the mortgage market. This information has been compiled from Black Knight’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.
JULY MARKET OBSERVATIONS
Monthly Foreclosure Start Volumes
»»
As mentioned, July saw the second lowest monthly volume of foreclosure starts in more than 12 years
»»
Year-to-date (YTD), just over 400K loans have been referred to foreclosure, the fewest over the first seven months of any year since 2000
»»
Looking at July foreclosure start rates for each state, there is a clear geographical split, with very little foreclosure start activity per capita in the northwestern half of the country
»»
Mississippi, Louisiana and New Jersey have all ranked in the top five states for foreclosure referrals every month thus far in 2017
»»
The situation continues to be geographically driven, with the deep south (along with Florida) and the northeastern states seeing higher inflows
»»
Larger economic issues in the south will make the region a focal point for mortgage delinquencies moving forward
»»
Looking at total foreclosure start volumes (including both first time and repeat foreclosures), repeat foreclosures accounted for 60 percent of all July activity, the second highest share of any month on record
»»
July saw just over 21K first time foreclosure referrals, the fewest since the turn of the century and well below the pre-crisis (2000-2003) monthly average of 65k
350000
300000
250000
200000
150000
100000
July Foreclosure Start Rates*
*Dark blue states had the highest FC start rates in July with foreclosure initiated on more than 1 in every 750 active mortgages
2017-07
2016-07
2015-07
2014-07
2013-07
2012-07
2011-07
2010-07
2009-07
2008-07
2007-07
2006-07
0
2005-07
50000
*Map above depicts the July 2017 foreclosure start rate for each state which is calculated by dividing foreclosure starts by the total number of active mortgages
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JULY 2017
MORTGAGE MONITOR
JULY MARKET UPDATES Hurricane Harvey Disaster Area - 2017 (FEMA Declared Disaster Counties) $179B
Hurricane Harvey Disaster Area - 2017 (FEMA Declared Disaster Counties)
»»
Though the situation around Hurricane Harvey continues to evolve, millions of Americans’ lives have been impacted by the storm and immense flooding
»»
The effects on mortgage performance may actually exceed those of Hurricane Katrina in 2005, both due to the magnitude of the rainfall as well as the population of the impacted area
»»
FEMA-designated disaster areas in southeast Texas associated with Hurricane Harvey have over twice as many mortgaged properties as Katrina’s FEMA-designated disaster areas, carrying nearly 4x the unpaid principal balance
1,180,000
Hurricane Harvey Disaster Area - 2017 (FEMA Declared Disaster Counties)
$179B
1,180,000
$179B
Number of Mortgaged 1,180,000 Properties
Outstanding Balance of Mortgages
Hurricane Katrina Disaster Area - 2005 (Louisiana and Mississippi FEMA Disaster Counties)
Number of Mortgaged Properties
Outstanding Balance of Mortgages
Hurricane Katrina Disaster Area - 2005 Outstanding Balance of Mortgages (Louisiana and Mississippi FEMA Disaster Counties)
Number of Mortgaged Properties
Hurricane Katrina Disaster Area - 2005 (Louisiana and Mississippi FEMA Disaster Counties)
456,000
$46B
456,000
$46B
Number of Mortgaged Properties
Outstanding Balance of Mortgages
456,000
$46B
Number of Mortgaged Properties
Outstanding Balance of Mortgages
Number of Mortgaged Properties
Outstanding Balance of Mortgages
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JULY 2017
MORTGAGE MONITOR
JULY MARKET UPDATES
Active Mortgages in Houston by Investor
»»
Fifty-six percent of loans (661K) in the impacted areas are GSE mortgages, but highdollar lending among portfolio lenders has increased exposure in that segment as well
»»
On average, portfolio loans in the Houston area have $90k higher balances than those held in agency and nonagency securities
»»
Within two months of Hurricane Katrina, the share of borrowers behind on mortgage payments in Louisiana and Mississippi’s FEMA-declared disaster areas increased by 25 percentage points, peaking at over 34 percent
»»
Within four months, the share of borrowers 90 or more days delinquent or in foreclosure had increased by nearly 14 percentage points rising to over 16 percent
»»
A similar impact to the Houston market would result in 300k borrowers missing at least one mortgage payment within the next two months and 160k borrowers becoming seriously delinquent (90+ days past due) within the next four months
661,000
GSE loans account for 55% of all mortgages in the Houston area. The average Portfolio loan in Houston has a balance of $240k compared to $139k for the rest of the market
230,000 189,000
99,000
GSE
GNMA
Portfolio
PRIVATE
Impact of Hurricane Katrina on Mortgage Payments (FEMA Declared Areas in LA and MS) Delinquency Rate
Sev DQ Rate (90+ DQ Including FC)
40.0%
25.0%
Within 4 months of the storm DQs rose by over 7% and the Sev DQ population nearly tripled
Hurricane Katrina
12/1/06
11/1/06
10/1/06
9/1/06
8/1/06
7/1/06
6/1/06
5/1/06
4/1/06
3/1/06
2/1/06
1/1/06
12/1/05
11/1/05
10/1/05
9/1/05
8/1/05
7/1/05
6/1/05
5/1/05
4/1/05
3/1/05
2/1/05
-5.0%
1/1/05
10.0%
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JULY 2017
MORTGAGE MONITOR
JULY MARKET UPDATES
Refinance Candidates (Monthly History) Refi Candidates
»»
Despite July’s decline in prepayment activity, refinance opportunities remain at a calendar year high
»»
With the exception of the week of July 13, when interest rates ticked slightly above 4.0 percent, rates have been extremely consistent over the past 12 weeks, with only an ~8BPS variance (15BPS if including the week of July 13th)
»»
Though borrowers continue to refinance (thus removing themselves from this population), the growth in home prices has perfectly offset that decline, a delicate balancing act that has kept the refinance candidate population steady over the past three months
»»
Due to home price growth, the 600K borrowers who refinanced in Q2 2017 have been replaced by roughly the same number of borrowers that now have enough available equity (20 percent or more) to refinance
»»
As of August 17th, 4.41M borrowers both could likely qualify for and have interest rate incentive to refinance, the most of any point in 2017 (but only a hair higher than the steady level seen from late May forward)
Freddie 30 Year Fixed Interest Rate
10M
7.5%
8M
6.0% 6M
4M 4.5%
2017-08
2016-08
2015-08
2014-08
2013-08
2012-08
2011-08
2010-08
2009-08
2008-08
2007-08
2006-08
2005-08
2004-08
2003-08
2002-08
M
2001-08
2M
3.0%
Refinance Candidates (Weekly History) Refi Candidates
Freddie 30 Year Fixed Interest Rate 4.5%
10M
8M
4.0% 6M
4M 3.5%
8/17/17
7/27/17
7/13/17
6/29/17
6/15/17
6/1/17
5/4/17
5/18/17
4/20/17
4/6/17
3/9/17
3/23/17
2/23/17
2/9/17
1/26/17
1/12/17
12/29/16
12/1/16
12/15/16
11/17/16
11/3/16
10/20/16
M
10/6/16
2M
3.0%
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JULY 2017
MORTGAGE MONITOR
»»
Though the Home Affordable Refinance Program (HARP) has been extended through 2018, the market impact will likely be limited
»»
As home price gains have helped to increase the number of traditional refinance candidates in the market, they have had the opposite effect on HARP eligibility
»»
As of the latest Federal Housing Finance Agency (FHFA) refinance report, just under 3,500 HARP originations took place in April, accounting for three percent of all refi activity for the month
»»
That represents a slight decline from the 13K quarterly HARP originations in Q4 2016 and Q1 2017 (approximately 4,333/ month)
»»
As 3.5M borrowers have already utilized the program and after years of continual home price gains, the HARPeligible borrower pool is relatively shallow
»»
As of the end of July, only ~108K borrowers would both meet HARP eligibility requirements and have at least 75 BPS of interest rate incentive to refinance through the program
»»
HARP eligibility is limited for the 2.5M active GSE mortgages with current LTVs above 80 percent due to the requirement that loans have been originated prior to June 2009
»»
Even expanding that to the bottom of the housing market in January 2012 – to include all borrowers negatively impacted by the downturn in home prices – would only increase the HARP-eligible/ incented population by approximately 50K
JULY MARKET UPDATES
HARP Refinance Candidates (Since Guideline Expansion in June 2012) 3.5M
3.0M
2.5M The number of HARP eligible borrowers that have interest rate incentive to use the program has declined from over 3 million in June 2012 to just over 108,000 today
2.0M
1.5M
1.0M
.0M
2012-06 2012-08 2012-10 2012-12 2013-02 2013-04 2013-06 2013-08 2013-10 2013-12 2014-02 2014-04 2014-06 2014-08 2014-10 2014-12 2015-02 2015-04 2015-06 2015-08 2015-10 2015-12 2016-02 2016-04 2016-06 2016-08 2016-10 2016-12 2017-03 2017-05 2017-07
.5M
HARP Eligibility Breakdown of Active GSE Mortgages 2,483,000
The largest drop in the eligibility waterfall comes when limiting the population of >80 LTV mortgages to those originated before June 2009. That said, even a modest expansion of the origination cut-off to the bottom of the housing market in January 2012 would have a limited impact on the number of eligible borrowers
352,800 227,600 108,100 Have > 80% Current Originated Before June LTV 2009
Meet Payment Requirements
Have 75BPS of Rate Incentive
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JULY 2017
MORTGAGE MONITOR
HOME PRICE TRENDS
Here, we look at home price appreciation trends in early 2017, providing a geographically granular view of the landscape and which markets are trending up or down. In addition, we examine areas where condominium appreciation is outpacing that of single family residences (SFRs). This information has been compiled from the Black Knight Home Price Index and the company’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.
Black Knight Home Price Index Monthly Rise in Home Prices (right axis)
»»
That is the fourth fastest start to any year on record dating back to 1994, just behind 2013 (coming out of the housing market bottom) at 6.8 percent, 2005 (8.1 percent) and 2004 (7.7 percent)
»»
The average U.S. property has appreciated by 6.2 percent over the past 12 months, the highest 12-month rate of appreciation since early 2014
»»
Nationally, home price appreciation (HPA) has accelerated by over 60BPS YTD, as the year started with homes appreciating at 5.6 percent annually
»»
Condominiums, which had seen deceleration last summer, have also regained momentum and are appreciating at their fastest pace since late 2014
»»
Condos are still appreciating at a slightly slower pace (5.8 percent annually) than SFRs (6.1 percent)
1.5% 8%
1.0% 6% 0.5%
4% 0.0%
2013
2014
2015
2016
One Month Rise in the Median Home Price
2.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Annual Rate of Home Price Appreciation
The 0.94 percent rise in home prices in June puts the total YTD gain for 2017 at 5.5 percent, meaning the value of the median priced U.S. home has increased by $14.7K over the past six months
Annual Rate of Home Price Appreciation (left axis)
10%
2%
»»
-0.5%
2017
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JULY 2017
MORTGAGE MONITOR
HOME PRICE TRENDS
Home prices rising the fastest in West / Northwest
Overall, 22 of the country’s 30 fastest appreciating markets are in the West/Northwest 13 of the top 30 are in Washington (8) or Oregon (5)
10 Fastest Appreciating MSAs
12 Month Increase in June 2017 Increase Home Prices in Home Prices
Seattle, WA
14.3%
1.4%
Salt Lake City, UT
10.3%
1.1%
Nashville, TN
10.0%
1.0%
Las Vegas, NV
10.0%
1.1%
Sacramento, CA
9.8%
1.4%
San Jose, CA
9.4%
1.2%
Dallas, TX
9.1%
0.5%
Buffalo, NY
8.8%
2.0%
Denver, CO
8.7%
1.2%
Portland, OR
8.7%
0.8%
»»
The west and northwest U.S. are seeing the fastest rates of annual HPA overall with 22 of the 30 fastest appreciating metros located west of the Rocky Mountains
»»
In fact, 13 of the top 30 are in Washington and Oregon alone
»»
Seattle, Wash. leads larger markets with home prices up 14.3 percent over the past 12 months, followed by Salt Lake City, Utah, Nashville, Tenn., and Las Vegas, Nev. all seeing home prices rising by 10 percent from one year ago
»»
San Jose, Calif. and Las Vegas have seen the most acceleration in 2017, with annual HPA accelerating by 4.1 percent in San Jose YTD, and Las Vegas’ rate of appreciation jumping from 6.5 percent at the start of the year to 10 percent in June
»»
Of the top 10 markets in terms of annual appreciation, eight have seen home price appreciation accelerate over the first half of 2017
»»
The two exceptions are Denver, Colo. (HPA falling from 10.1 percent in January to 8.7 percent in June) and Portland, Ore. (10.7 percent down to 8.7 percent); despite slowing, both are still appreciating at a faster rate than the national average
»»
Among the 50 largest metro areas 36 have seen HPA rise in 2017, while only 14 metros have seen the rate of appreciation slow
Negative 0% - 4% 4% - 8% 8% or more
Map above depicts the annual rate of home price appreciation for each MSA as of June 2017 according to the Black Knight Home Price Index
Table above includes rankings among the 50 largest MSAs
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JULY 2017
MORTGAGE MONITOR
HOME PRICE TRENDS
Southwest and Florida remain the furthest behind their pre-recession home price peaks
»»
In most areas, home prices peaked around mid-2006, then fell steadily downward from 2006, bottoming out in January 2012
»»
At the national level, home prices surpassed their 2006 peak in February 2017 and are now nearly five percent above pre-recession peak values
»»
As of June, 34 states and the District of Columbia have recovered to pre-recession levels or better, along with 29 of the nation’s 50 largest metro markets
»»
The central US has largely fully recovered, with an area reaching from central Texas through Colorado, Nebraska, South Dakota and North Dakota seeing prices up by 15 percent or more from precrisis peaks
»»
Denver and Austin, Dallas, Houston and San Antonio, Texas are all in the top 10 of areas which have surpassed 2006 peaks
»»
In fact, Denver home prices are 53 percent above 2006 levels, while Austin is up 43 percent
»»
Other areas (including inland California, lower Nevada, Arizona and Florida) remain 15 percent or more below 2006 peaks; coastal northeast home prices remain moderately below 2006 levels as well
»»
Las Vegas, though seeing the second highest HPA acceleration of any major metro in the first half of 2017, remains 27 percent below peak levels (the most of the 50 largest metros)
»»
Together, California and Florida account for 20 of the 35 metros areas furthest below 2006 levels
>15% above pre-2012 peak 0%-15% above pre-2012 peak 0%-15% below pre-2012 peak >15% below pre-2012 peak
10 MSAs Furthest Above Pre-2012 Peak vs Current Their Median Home Price Pre-2012 Home Price Peak Denver, CO Austin, TX San Jose, CA Dallas, TX Houston, TX Nashville, TN Buffalo, NY Portland, OR San Francisco, CA San Antonio, TX
53% 43% 42% 42% 30% 29% 27% 25% 24% 22%
6-Month Change in YoY HPA
10 MSAs Furthest Below Their Pre-2012 Home Price Peak
Pre-2012 Peak vs Current Median Home Price
6-Month Change in YoY HPA
-1.4% -0.3% 4.1% 0.2% 0.0% 0.4% 2.5% -1.9% 1.4% -0.6%
Las Vegas, NV Orlando, FL Riverside, CA Phoenix, AZ Jacksonville, FL Miami, FL Tampa, FL Chicago, IL Hartford, CT Baltimore, MD
-27% -21% -18% -17% -16% -15% -15% -13% -12% -11%
3.5% 0.6% 0.6% 0.3% 1.5% -0.4% 0.0% -0.2% 0.5% 0.5%
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JULY 2017
MORTGAGE MONITOR
HOME PRICE TRENDS
Las Vegas Home Price Appreciation Las Vegas - Condo
Las Vegas - SFR
National - SFR
»»
The annual rate of HPA in Las Vegas has risen by 3.5 percent so far in 2017 (the second highest acceleration among the top 50 markets, behind only San Jose)
»»
Acceleration in the condo market is much more pronounced, rising by 7.2 percent (from 6.4 to 13.6 percent YTD) over the past six months, dwarfing the 60BPS rise in the national condo HPA rate
»»
On average, condo prices in Las Vegas are up 13.6 percent from last year, more than double the national average (and second only to Seattle’s 17 percent), while SFRs are up 9.7 percent (over 50 percent above the national average)
»»
It’s important to reiterate: even with such home price growth and acceleration, Las Vegas home prices remain 27 percent off their pre-crisis peak
»»
Seattle has the highest HPA rate of any market in the country, in both the SFR (13.7 percent) and condo (17.3 percent) markets
»»
Seattle continues trending upward, with the annual rate of appreciation for condos accelerating by nearly three percent YTD, and nearly two percent for SFRs
»»
The average SFR in Seattle has increased in value by over $50K YTD, with the average condo up by nearly $40k
National - Condo
Annual Rate of Home Price Appreciation
27%
18% 13.6%
9.7% 9%
0%
Seattle Home Price Appreciation Seattle - Condo
Seattle - SFR
National - SFR
National - Condo
Annual Rate of Home Price Appreciation
27%
18%
17.3% 13.7%
9%
0%
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JULY 2017
MORTGAGE MONITOR
HOME PRICE TRENDS
Denver Home Price Appreciation Denver - Condo
Denver - SFR
National - SFR
»»
Denver and Austin are the top two metros, respectively, with current home prices furthest above 2006 local market peaks
»»
As mentioned, Denver is 53 percent above its 2006 peak and still appreciating at a rate well above the national average for both condos and SFRs
»»
There has been some slowing, with Denver’s annual rate of HPI decelerating by two percent among condos and over one percent among SFRs YTD
»»
Note: though not specifically depicted here, the trend lines for Portland are very similar to what we see in Denver, with appreciation slowing in both the SFR and condo markets while remaining above the national average
»»
Austin ranks second nationally when comparing current home price levels to 2006 peaks (up 43 percent), but there’s been deceleration in that market over the past two years as well
»»
In fact, the rates of both condo and SFR HPA in Austin have now fallen below the national average
National - Condo
Annual Rate of Home Price Appreciation
20%
15%
10%
11.0% 8.2%
5%
0%
Austin Home Price Appreciation Austin - Condo
Austin - SFR
National - SFR
National - Condo
Annual Rate of Home Price Appreciation
20%
15%
10%
5% 5.4%
0%
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JULY 2017
MORTGAGE MONITOR
»»
Among the 50 largest markets, SFRs are appreciating faster than condos by one percent or more in 12, while condos are appreciating faster in 13
»»
In coastal areas, SFRs tend to be either appreciating at the same, or a faster rate than condos
»»
This is particularly noticeable in Florida, where home price appreciation (especially among SFRs) is above the national average in many areas but condo appreciation is lagging markedly behind that of SFRs
»»
In Miami, Fla., for example, the average SFR has risen by 6.8 percent year-over-year, while the average condo has only gained 2.7 percent
»»
San Diego and Santa Rosa, Calif. are two of a handful of coastal areas where condo prices are rising faster than that of SFRs
»»
SFR appreciation is currently outpacing that of condos in the northeast as well, with the largest difference seen in Buffalo, N.Y. where SFR appreciation is over five percent higher than condos
»»
In the New York City metro area, SFRs are appreciating at a 2.2 percent higher rate than condos, while in Philadelphia the difference is two percent in favor of SFRs
»»
One noticeable northeastern exception is Boston, where condos are appreciating one percent faster than SFRs
»»
On the opposite end of the spectrum, other areas are seeing markedly higher levels of annual HPA among condos; Las Vegas (3.9 percent above SFRs), Seattle (3.3 percent above) and Denver (up 2.8 percent)
HOME PRICE TRENDS
Single Family home price gains outpacing condos in the Northeast and many coastal areas
Buffalo, NY SFR: +8.3% Condo: +3.1% SFR Higher by 5.2%
Seattle, WA SFR: +13.7% Condo: +17.3% Condos Higher by 3.6%
New York/Newark SFR: +6.5% Condo: +4.4% SFR Higher by 2.1%
San Francisco, CA SFR: +8.7% Condo: +7.3% SFR Higher by 1.5%
Las Vegas, NV SFR: +9.7% Condo: +13.6% Condos Higher by 3.9%
Denver, CO SFR: +8.2% Condo: +11.0% Condos Higher by 2.8%
Miami, FL SFR: +6.8% Condo: +2.7% SFR Higher by 4.2%
Areas where Single Family homes are appreciating faster than Condos ( >1% difference) Areas where Condos are appreciating faster than Single Family homes ( >1% difference)
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JULY 2017
MORTGAGE MONITOR
Here, we examine second quarter mortgage origination volumes and look at how much purchase lending may still be hampered by tight lending standards. This information has been compiled from Black Knight’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.
Q2 2017 MORTGAGE ORIGINATIONS
First Lien Mortgage Origination Volumes (in $Billions) Purchase Originations
»»
Quarterly origination data showed positive growth in lending in Q2 2107, with $467 billion in first lien mortgages originated, down 16 percent from a year ago, but up 20 percent over Q1
»»
Refinance lending made up just 31 percent of all Q2 originations – the lowest such share in over 16 years
»»
Refinance volumes fell 20 percent from Q1 (a $37B decline), but that drop was more than offset by a 57 percent (up $117B) seasonal rise in purchase lending
Refinance Originations
$1,200
$1,000
$800
$600
$400
$0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
$200
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
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JULY 2017
MORTGAGE MONITOR
»»
$321B in purchase loans were originated in Q2 2017, up six percent from one year ago and the highest quarterly volume since 2007
»»
Originations were up 57 percent from the first quarter, a fairly typical seasonal increase
»»
Purchase originations are now 120 percent above the bottom of the market (Q2 2017 vs. Q2 2011) and are more than 30 percent above the 2000-2003 average in terms of total dollars lent
»»
However, when analyzing the number of purchase loans being originated, total purchase origination counts still lag pre-crisis averages by almost 30 percent
»»
The reason for these varying trends (between origination counts and total dollars lent) is that the average loan amount of purchase originations continues to rise, sitting near an all-time high of $286K in Q2 2017
»»
This is partly due to rising home prices, but is more decidedly a result of allbut-non-existent second lien usage among purchase transactions
»»
The net effect is more leverage – thus higher average loan amounts – on the first lien side, especially among the growing number of lower down payment purchase transactions, as was reported in the June Mortgage Monitor
»»
While purchase originations appear strong from a total dollar amount perspective, the market still does not appear to be performing at peak capacity when looking at purchase origination counts
Q2 2017 MORTGAGE ORIGINATIONS Purchase Origination Volume $500
Purchase origination volumes ($) are well above pre-bubble (2000-2003) levels
$321
$400
$300
$200
$0
2000-Q2 2000-Q3 2000-Q4 2001-Q1 2001-Q2 2001-Q3 2001-Q4 2002-Q1 2002-Q2 2002-Q3 2002-Q4 2003-Q1 2003-Q2 2003-Q3 2003-Q4 2004-Q1 2004-Q2 2004-Q3 2004-Q4 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2
$100
Purchase Origination Loan Count 2.5M
but the number of purchase loans being originated remains well below ‘normal’ 1.1M
1.6M
1.5M
1.5M
1.4M
2.0M
1.0M
.0M
$300K
2000-Q2 2000-Q3 2000-Q4 2001-Q1 2001-Q2 2001-Q3 2001-Q4 2002-Q1 2002-Q2 2002-Q3 2002-Q4 2003-Q1 2003-Q2 2003-Q3 2003-Q4 2004-Q1 2004-Q2 2004-Q3 2004-Q4 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2
.5M
Average Purchase Loan Amount
$286K
$250K
$200K
$100K
The difference is due to rising average loan amounts among purchase originations which at $286,000 on average in Q2 2017 are near an all time high
2000-Q2 2000-Q3 2000-Q4 2001-Q1 2001-Q2 2001-Q3 2001-Q4 2002-Q1 2002-Q2 2002-Q3 2002-Q4 2003-Q1 2003-Q2 2003-Q3 2003-Q4 2004-Q1 2004-Q2 2004-Q3 2004-Q4 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2
$150K
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JULY 2017
MORTGAGE MONITOR
Q2 2017 MORTGAGE ORIGINATIONS
Distribution of Q2 Purchase Originations by Credit Score Bucket < 620
620-659
660-719
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One key contributor to the constrained purchase market is the more stringent credit requirements enacted in response to the financial crisis
»»
Consider that borrowers with credit scores of 720 or higher accounted for 74 percent of all Q2 2017 purchase loans as compared to a pre-crisis average of 47 percent
»»
Pre-crisis, 27 percent of purchase lending was to borrowers with 660-719 credit scores and 26 percent to those with credit scores below 660
»»
Today, there are 65 percent fewer purchase loans being originated to borrowers with credit scores below 720 than in those years
»»
The lack of credit availability for those borrowers is causing a strong headwind for the purchase market
»»
Using 2000-2003 averages as a measure, as many as 645K purchase loans were not originated in Q2 due to tighter lending standards
»»
To put it another way, the purchase market is operating at less than two-thirds of peak capacity because of these factors
>= 720
47%
74%
27%
13% 20% 13% 5% 2000-2003 Average
2017
Second Quarter Purchase Originations by Credit Score Bucket 2000-2003 Average
2017
900K
750K
600K
The number of purchase loans being originated to borrowers with 720+ credit scores is 14% above 2000-2003 levels, while purchase loans to lower credit classes remain 65% below their 2000-2003 averages
450K
300K
150K
K
= 720
Confidential, Proprietary and/or Trade Secret TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, and/or an affiliate. © 2017 Black Knight Financial Technology Solutions, LLC. All Rights Reserved.
JULY 2017
MORTGAGE MONITOR
APPENDIX
Jun-17
Monthly Change
YTD Change
Yearly Change
Delinquencies
3.90%
2.82%
-8.14%
-13.49%
Foreclosure
0.78%
-2.96%
-17.22%
-27.96%
Foreclosure Starts
53,300
-5.66%
-24.29%
-13.05%
Seriously Delinquent (90+) or in Foreclosure
1.87%
-1.25%
-16.70%
-23.76%
New Originations (data as of May-17)
622K
5.4%
-3.8%
-13.1%
»»
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Delinquencies
3.90%
3.80%
3.79%
4.08%
3.62%
4.21%
4.25%
4.42%
4.46%
4.35%
4.27%
4.24%
4.51%
Foreclosure
0.78%
0.81%
0.83%
0.85%
0.88%
0.93%
0.94%
0.95%
0.98%
0.99%
1.00%
1.04%
1.09%
Foreclosure Starts
53,300
56,500
55,800
52,800
60,300
57,900
70,400
59,700
60,400
56,500
61,700
68,800
61,300
Seriously Delinquent (90+) or in Foreclosure
1.87%
1.90%
1.93%
2.00%
2.05%
2.19%
2.25%
2.29%
2.33%
2.33%
2.32%
2.36%
2.46%
622K
590K
504K
549K
429K
476K
646K
652K
694K
723K
763K
635K
622K
590K
504K
549K
429K
476K
646K
723K
763K
635K
3.90%
3.80%
3.79%
4.08%
3.62%
4.25%
4.21%
4.42%
4.46%
4.35%
4.27%
4.24%
4.51%
652K
New Originations
Total Delinquencies
694K
New Originations
July 2017 Data Summary
Confidential, Proprietary and/or Trade Secret TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, and/or an affiliate. © 2017 Black Knight Financial Technology Solutions, LLC. All Rights Reserved.
JULY 2017
MORTGAGE MONITOR
APPENDIX
Month
TOTAL ACTIVE COUNT
30 DAYS
60 DAYS
90+ DAYS
FC
Total NonCurrent
Average Days Average Days Ratio of 90+ FC Starts Delinquent for Delinquent for to FC 90+ FC
1/31/05
47,706,128
1,197,062
339,920
458,719
276,745
2,272,446
50,922
242
324
165.8%
1/31/06
50,900,620
1,242,434
387,907
542,378
258,613
2,431,332
76,477
207
308
209.7%
1/31/07
53,900,458
1,425,030
468,441
551,439
393,973
2,838,883
117,419
203
267
140.0%
1/31/08
55,478,782
1,743,420
676,266
950,639
813,560
4,183,885
195,033
190
256
116.8%
1/31/09
55,788,441
2,001,314
932,436
1,878,981
1,321,029
6,133,760
250,621
193
323
142.2%
1/31/10
55,098,009
1,945,589
903,778
2,972,983
2,068,572
7,890,922
292,308
253
418
143.7%
1/31/11
53,861,778
1,750,601
746,634
2,078,130
2,245,250
6,820,615
277,374
333
527
92.6%
1/31/12
52,687,781
1,592,463
652,524
1,796,698
2,205,818
6,247,503
223,394
395
666
81.5%
1/31/13
51,229,692
1,464,583
587,661
1,551,415
1,742,689
5,346,348
156,654
460
803
89.0%
1/31/14
50,380,779
1,341,074
529,524
1,278,955
1,213,046
4,362,599
97,467
486
935
105.4%
1/31/15
50,412,744
1,238,453
465,849
1,060,002
884,901
3,649,204
93,280
509
1,031
119.8%
1/31/16
50,541,353
1,298,682
444,594
831,284
659,237
3,233,797
71,900
495
1,047
126.1%
1/31/17
50,871,357
1,108,712
389,768
663,521
480,598
2,642,599
70,357
454
1,013
138.1%
2/28/17
50,729,433
1,124,037
369,946
640,797
470,259
2,605,038
57,948
456
1,004
136.3%
3/31/17
50,649,333
923,503
319,382
588,520
447,942
2,279,346
60,342
476
1,007
131.4%
4/30/17
50,753,090
1,150,918
340,008
581,464
433,278
2,505,669
52,769
471
1,007
134.2%
5/31/17
50,822,103
1,023,548
342,106
561,556
420,975
2,348,185
55,798
477
1,006
133.4%
6/30/17
50,875,908
1,031,476
344,883
555,183
410,018
2,341,560
56,496
472
999
135.4%
7/31/17
50,885,842
1,069,321
361,762
555,391
397,953
2,384,427
53,321
457
1,001
139.6%
»»
Loan counts and average days delinquent
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JULY 2017
MORTGAGE MONITOR
APPENDIX
Yr/Yr NonChange in Curr % NC%
State
Del %
FC %
National
3.9%
0.78%
4.7%
MS
9.7%
0.8%
7.5%
AL WV
LA
*
Yr/Yr NonChange in Curr % NC%
State
Del %
FC %
-16.3%
National
3.9%
0.78%
4.7%
10.5%
-10.5%
MD
*
4.7%
0.9%
1.2%
8.8%
-9.2%
OH
*
4.5%
6.6%
0.6%
7.2%
-11.9%
TX
6.2%
0.8%
7.0%
-15.9%
NM
Yr/Yr NonChange in Curr % NC%
State
Del %
FC %
-16.3%
National
3.9%
0.78%
4.7%
-16.3%
5.6%
-14.8%
NV
3.0%
1.0%
4.0%
-22.4%
1.0%
5.5%
-14.4%
WY
3.5%
0.5%
4.0%
-7.7%
5.0%
0.5%
5.5%
-10.6%
DC
2.8%
1.2%
3.9%
-23.0%
*
3.9%
1.4%
5.3%
-15.9%
VA
3.5%
0.3%
3.8%
-14.8%
3.1%
0.4%
3.5%
3.4%
3.2%
0.3%
3.5%
-9.3%
ME
*
4.6%
2.0%
6.6%
-17.6%
FL
*
3.9%
1.4%
5.2%
-20.5%
AK
NY
*
4.1%
2.4%
6.5%
-19.3%
HI
*
2.9%
2.2%
5.1%
-20.0%
NE
NJ
*
4.3%
2.1%
6.4%
-27.7%
VT
*
3.5%
1.5%
4.9%
-13.9%
UT
2.9%
0.3%
3.2%
-20.2%
IN
*
5.4%
1.0%
6.4%
-12.5%
NC
4.4%
0.5%
4.9%
-15.0%
AZ
2.8%
0.3%
3.1%
-13.7%
RI
5.1%
1.2%
6.3%
-18.1%
KY
4.0%
0.9%
4.9%
-14.1%
SD
2.4%
0.5%
2.9%
-7.3%
AR
5.6%
0.6%
6.2%
-11.4%
MA
3.9%
0.9%
4.8%
-19.0%
CA
2.6%
0.3%
2.9%
-16.9%
*
*
*
PA
*
5.1%
1.1%
6.1%
-14.0%
KS
*
4.3%
0.6%
4.8%
-13.1%
WA
2.3%
0.5%
2.8%
-22.7%
OK
*
5.0%
1.1%
6.1%
-15.4%
IL
*
3.7%
1.0%
4.8%
-13.8%
ID
2.3%
0.4%
2.7%
-17.3%
DE
*
4.7%
1.2%
6.0%
-16.1%
MO
4.2%
0.3%
4.6%
-15.9%
MT
2.3%
0.4%
2.7%
-13.1%
CT
*
4.5%
1.4%
5.8%
-14.4%
WI
3.5%
0.8%
4.3%
-14.4%
OR
2.0%
0.6%
2.6%
-24.7%
GA
5.3%
0.5%
5.7%
-15.4%
MI
4.0%
0.3%
4.3%
-12.5%
MN
2.3%
0.2%
2.5%
-13.3%
TN
5.3%
0.4%
5.7%
-15.4%
NH
3.6%
0.5%
4.1%
-15.9%
ND
1.7%
0.6%
2.3%
-10.3%
SC * 4.7% 0.9% * - Indicates Judicial State
5.6%
-14.8%
IA
3.3%
0.7%
4.0%
-12.9%
CO
2.0%
0.2%
2.2%
-20.0%
*
*
*
»»
State-by-state rankings by non-current loan population
Confidential, Proprietary and/or Trade Secret TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, and/or an affiliate. © 2017 Black Knight Financial Technology Solutions, LLC. All Rights Reserved.
JULY 2017
MORTGAGE MONITOR
DISCLOSURES
Please refer to the links below for specific disclosures relating to Product Definitions, Metrics Definitions and Extrapolation Methodology.
>> PRODUCT DEFINITIONS >> METRICS DEFINITIONS >> EXTRAPOLATION METHODOLOGY
Confidential, Proprietary and/or Trade Secret TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, and/or an affiliate. © 2017 Black Knight Financial Technology Solutions, LLC. All Rights Reserved.