The Data & Analytics division of Black Knight has released its latest Mortgage Monitor Report, based upon the company’s mortgage performance, housing and public records datasets.
Black Knight looked at the current trend of rising early-stage delinquencies, particularly among purchase loans. The number of loans that were delinquent six months following origination has been increasing over the past 24 months, with first-time homebuyers being impacted most heavily.
“We’ve seen early-stage delinquencies rise over the last several years, with the increase being driven primarily by purchase loans,” said Black Knight Data & Analytics President Ben Graboske. “About 1% of loans originated in Q1 2019 were delinquent six months after origination. While that’s less than one-third of the 2000-2005 average of 2.95%, it represents a more than 60% increase over the last two years and is the highest it’s been since late 2010.”
Graboske further noted that early-stage GSE delinquencies currently stand at 0.6%, up two tenths of a percentage point over the past 24 months, but still 40% below the market average and 60% below their own 2000-2005 average of 1.3%. “Though there has been some softening in GSE purchase loan performance, 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% between 2014 and 2018. However, whereas first-time homebuyers represent just over 40% of GSE purchase loans, they make up 70% of the GNMA purchase market.”
That concentration, Graboske notes, is contributing to a more significant increase in early-stage delinquencies among GNMA loans, which saw 3.3% of loans delinquent six months after origination. “That’s up 1.2 percentage points from two years ago, and though still roughly half the 2000-2005 pre-crisis average, it represents the sharpest increase we’ve seen in the market in recent years.”
Find additional details in Black Knight’s September 2019 Mortgage Monitor Report.