Payments Surpass Cost-Burdened Threshold As Affordability Sinks To Lowest Point In 35 Years

Housing payments have surpassed the dreaded 30% cost-burdened threshold thanks to the 30-year fixed rate’s recent half-point jump. Black Knight reports that it now costs $2,103 to make the principal and interest (P&I) payment on an average-priced home with a 20% downpayment. That equates to 36.2% of the median household income and sinks affordability to its lowest level in more than 35 years. Payments as a percentage of income are now higher than the previous record of 34.1% in July 2006, and significantly up from the long-term average of 25.1%. The Department of Housing and Urban Development defines cost-burdened families as those “who pay more than 30% of their income for housing” and “may have difficulty affording necessities such as…

Delinquencies Reach Another Record Low

Delinquencies dropped to another record low in March, with only 2.7% of all mortgages in the U.S. experiencing some stage of delinquency, according to CoreLogic’s monthly Loan Performance Insights Report. Delinquencies were down 2.2 percentage points from March 2021, when they were at 4.9%. The share of early-stage delinquencies, or loans 30 to 59 days past due, was 1%, unchanged YOY, while the share of adverse delinquencies (60 to 89 days past due) was down 0.1% YOY to 0.3%. Serious delinquencies accounted for only 1.4% of U.S. mortgages, down from 3.5% the year prior and a high of 4.3% in August 2020. The share of mortgages in some stage of the foreclosure process, known as the Foreclosure Inventory Rate, decreased…

Rate Locks Dropped Again In May As Refis Hit New Low

Rate lock volumes dropped again in May by 4.8% despite interest rate growth slowing, according to Black Knight’s latest Originations Market Report. While conforming 30-year rates rose at the beginning of the month to 5.5%, they cooled by month-end to 5.34%, 7 basis points down from April. Still, lock volumes fell for both rate/term and cash-out refis, down 23.6% and 11.9% respectively. Cash-outs are now down 42.2% from last year. “Ultimately, our OBMMI daily interest rate tracker showed 30-year conforming offerings finishing the month at 5.34%, down 7 basis points from last month. Still, despite this plateau in rates, rate lock volume continued to slide in May, with declines seen across all loan purposes,” said Scott Happ, president of Optimal…

Home Equity Reaches Another All-Time High

Home prices have risen 42% since the beginning of the pandemic and have gained 9% in value since the first of the year, with equity reaching another all-time high, according to Black Knight’s latest Mortgage Monitor Report. Black Knight reported that the annual rate of appreciation dropped slightly to 19.9% in April, down from an upwardly revised 20.4% for March. Despite this, rising prices and interest rates have brought about the worst affordability since July 2006. “While a downward shift from 20.4% to 19.9% annual growth is hardly cause for concern, it’s also likely we’ve not yet seen the full impact of recent rate increases. Rather, April’s decline is more likely a sign of deceleration caused by the modest rate…

Delinquencies Down Nearly 40% YOY

The delinquency rate nationwide dropped to 2.80% in April, as overall delinquencies fell almost 40% YOY, according to Black Knight’s “first look” at its April 2022 month-end mortgage performance stats. The numbers reflect the mortgage market’s continued recovery from pandemic impacts. Prepayment activity dropped 19.1% from March and is down 61.8% YOY due to rapidly increasing interest rates. Rates averaged 5.25% last week. The number of borrowers who are a single payment overdue rose 7.9% month-over-month, which Black Knight says is typical of the season. That increase was offset by improvements among more seriously delinquent borrowers. The volume of borrowers three or more months past due fell by 8% from the month prior. Serious delinquencies are down between 6% and…

Housing Market Cooling In Some Parts Of The Country After A Wild Pandemic Ride

By TYRONE TOWNSEND As the spring selling season continues, those in the industry are noticing that the housing market in parts of the country is beginning to cool after a wild ride during the pandemic. Bidding wars and all-cash bids were prevalent due to rising housing prices and low availability. As more investors invaded the market, millions of average Americans were left on the sidelines, unable to compete. The housing market is already beginning to cool but despite this fact, respite for homeowners – particularly first-time purchasers – is unlikely as the Federal Reserve continues to boost interest rates to battle inflation, driving up mortgage rates. According to Realtor.com’s Monthly Home Trends Report, housing inventory in the United States was…

Forbearances Hold Steady At Month-End

In its last weekly report, Black Knight found forbearances largely holding steady in a “typical” pattern for the end of the month. Overall, forbearances rose by 2,300 plans last week. Loans held by portfolios and PSLs increased by 7,300 (+3.5%), though this was tempered by decreases for GSE loans (-1.2%, 2,400) and FHA/VA (-1.1%, 2,700). Plan volume is down 54,700 (-7.3%) month-over-month.  Some 78,000 plans are up for review in early May, the next time Black Knight expects to see significant improvement. One-third should expire.  Overall, U.S. homeowners are in a good position to come out of forbearance strong. In January, delinquencies dropped to their lowest rate since at least January 1999 thanks to home price appreciation and the strong…

Morning Roundup (4/12/2022)– Fast 15 Guarantee, Mortgage Monitor

Good Morning! Today is Tuesday, April 12. After meeting with Vladimir Putin, Austria’s chancellor said he feared Russia would intensify the brutality of its attacks. U.S. stocks fell Monday as Covid-19 lockdowns in China added to investors’ worries. Thirteen people have been transported to area hospitals after a shooting at a Brooklyn subway station. The Mortgage Note Reports Fast 15 Guarantee: Rocket Pro TPO is promising to clear eligible loans in no more than 15 business days and leaders there say they are able to guarantee these closing times because of the company’s investment in technology. Editor Kimberley Haas reports. Mortgage Monitor: Rate lock activity rose 19.1% month-over-month in March as homeowners move before interest rates rise further. IMB Profits…

Rate Lock Activity Rose In March

Rate lock activity rose in March as homeowners move before rates rise further, according to Black Knight’s latest Originations Market Monitor report. Mortgage rates exceeded 4.9% in March but dropped at the end of the month to 4.79%. The spread between mortgage rates and 10-year Treasuries climbed 20 basis points. “Mortgage interest rates spiked in March, with 30-year offerings climbing 70 basis points over the course of the month,” said Scott Happ, president, Optimal Blue, a division of Black Knight.  “And yet, despite seeing the fastest one-month rise in rates in nearly 13 years, we saw purchase lock volumes increase by 31% from February – likely as prospective buyers moved to lock in their loans before rates climbed any higher.”…

Forbearances Fell Below 700k For The First Time Since The Pandemic Began

Early April exits offset two weeks of rising forbearance starts and re-starts, resulting in plan volumes dropping below 700,000 for the first time since the pandemic began, according to Black Knight’s blog, Vision. Overall, forbearances fell by 63,200 plans last week. GSE plans fell by 24,500 (-11%), followed by FHA/VA (-21,800, -8.1%) and loans held by portfolios and PSLs (-17,000, -16.7%). New plan starts still rose slightly, up to 10,300 (+200). However, last week they dropped to their lowest level in four months, so the uptick may not be cause for concern. Restarts also rose by 1,400 to 21,600. Plan volume is down 66,200 (-8.8%) month-over-month.  Forbearance volumes have ticked up some after long periods of decline, but are generally…