Daily Archives: February 13, 2018

Early-Stage Mortgage Delinquencies Dip Again in November as Hurricanes’ Impact Wanes

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  • Overall Mortgage Delinquency Rate Fell 0.1 Percentage Points Year Over Year
  • Foreclosure Rate Declined 0.2 Percentage Points Year Over Year
  • Transition Rates for 60-Day and 90-Day Delinquency Rose Sharply in Texas and Florida Likely Due to 2017 Hurricanes

IRVINE, CA – February 13, 2018 (BUSINESS WIRE) CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report which shows that, nationally, 5.1 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in November 2017. This represents a 0.1 percentage point year-over-year decline in the overall delinquency rate compared with November 2016 when it was 5.2 percent.

As of November 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.6 percent, down 0.2 percentage points from 0.8 percent in November 2016. The foreclosure inventory rate has held steady at 0.6 percent since August 2017, the lowest level since June 2007 when it was also at 0.6 percent. This past November’s foreclosure inventory rate was the lowest for the month of November in 11 years, since it was also 0.6 percent in November 2006.

Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

The rate for early-stage delinquencies, defined as 30-59 days past due, was 2.2 percent in November 2017, down 0.1 percentage points from 2.3 percent in October 2017 and unchanged from 2.2 percent in November 2016. The share of mortgages that were 60-89 days past due in November 2017 was 0.9 percent, unchanged from October 2017 and up from 0.7 percent in November 2016. The serious delinquency rate, reflecting loans 90 days or more past due, was 2.0 percent in November 2017, up from 1.9 percent in October 2017 and down from 2.3 percent in November 2016. Prior to November 2017, the serious delinquency rate had held steady for five consecutive months at 1.9 percent—the lowest level for any month since October 2007 when it was also 1.9 percent.

“The effects of Hurricanes Harvey, Irma and Maria appear clearly in our mortgage delinquency report,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Serious delinquency rates are up sharply in Texas and Florida compared with a year ago, while lower in all other states except Alaska. In Puerto Rico, the serious delinquency rate jumped to 6.3 percent in November, up 2.7 percentage points compared with a year before. In the Miami metropolitan area, serious delinquency was up more than one-third from one year earlier to 5.1 percent, and it more than doubled to 4.6 percent in the Houston area.”

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 1 percent in November 2017, down from 1.1 percent in October 2017 and unchanged from 1 percent in November 2016. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent and it peaked in November 2008 at 2 percent.

“Transition rates for 60-day and 90-day delinquency, while stable across most of the country, were up sharply in many areas impacted by the 2017 hurricanes,” said Frank Martell, president and CEO of CoreLogic. “In many of the harder-hit regions, such as the Houston and Miami metropolitan areas, housing stock availability has taken a hit as many homes were damaged and are no longer habitable. As a result, we expect to see further upward pressure on prices and rents for habitable homes, which will continue to erode affordability.”

For ongoing housing trends and data, visit the CoreLogic Insights Blog: www.corelogic.com/blog.

Methodology

The data in this report represents foreclosure and delinquency activity reported through November 2017.

The data in this report accounts for only first liens against a property and does not include secondary liens. The delinquency, transition and foreclosure rates are measured only against homes that have an outstanding mortgage. Homes without mortgage liens are not typically subject to foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data.

Source: CoreLogic

The data provided is for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be re-sold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data is illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact Lori Guyton at lguyton@cvic.com or Bill Campbell at bill@campbelllewis.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.

About CoreLogic

CoreLogic (NYSE: CLGX) is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com.

CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries.

Contacts

For CoreLogic
For real estate industry and trade media:
Bill Campbell
(212) 995-8057
bill@campbelllewis.com

or

For general news media:
Lori Guyton
(901)277-6066
lguyton@cvic.com

Southeast and Midwest Cities Most Accessible for First-Time Homebuyers

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As rising prices reduce buying power in some areas, LendingTree study reveals most accessible markets for first-time homebuyers

Charlotte, NC – Feb. 13, 2018 (PRNewswire) Ten years after the housing crisis, national home prices have now surpassed prior peaks, inventory is tight, and homebuyers are facing bidding wars. These challenges are even more onerous for first-time homebuyers, who cannot capitalize on profits from an existing home sale to at least partially fund the down payment for a new home. However, homeownership is still attainable for first-time homebuyers, and some cities have more favorable conditions for those considering homeownership.

In a new study, LendingTree ranked the best cities for first-time homebuyers in the nation’s 100 largest cities. The factors that made a housing market favorable were:

  • Average down payment amount. The big initial pile of cash is something most first-time buyers struggle with and takes years of savings for many.
  • The share of buyers using an FHA mortgage. Buyers using FHA financing are required to put down as little as 3%, and have higher limits on the debt-to-income ratios. These and other loan features increase the likelihood of being approved for a mortgage while still getting competitive mortgage interest rates.
  • Average down payment percentage. Lower down payments increase access for first-time buyers. Down payments are one of the main obstacles to home ownership, as many renters can afford the monthly mortgage payment.
  • Percentage of buyers who have less than prime credit (below 680). First-time buyers often have lower credit scores than repeat buyers so are more competitive in areas without as many prime borrowers.
  • The share of homes sold that the median income family can afford (Housing Opportunity Index). Many cities have become too expensive for the median family. This measure of affordability in our ranking elevates cities that are still affordable for median income families.
  • Average FHA down payment as a percentage of average down payment for all loans: The lower down payment for FHA loans is more valuable in some areas than others. This measure of the FHA benefit tells us how much FHA borrowers truly saved on down payments.

Several down payment variables are included in the ranking because research has identified down payments as the biggest obstacles to home ownership. The various down payment measurements are not precisely correlated, however each figure is helpful for consumers considering homeownership.

Most Accessible Cities for First-Time Homebuyers:

1. Little Rock, Ark.
2. Birmingham, Ala.
3. Grand Rapids, Mich.
4. Youngstown, Ohio
5. Winston, N.C.
6. Dayton, Ohio
7. Indianapolis
8. Scranton, Pa.
9. Pittsburgh
10. Cincinnati

Little Rock rolls out the welcome mat.
Little Rock did not top any of the six criteria but was in the top 20 in all categories, giving it the best aggregate ranking. Its best attribute is a low average down payment of just 12% or $24,896. It also scores well in the share of non-prime homebuyers at an even 50%.

Birmingham puts another southern city second.
Birmingham scored particularly well on the down payment percentage at just 12% with a down payment amount at just over $27,000.

Grand Rapids is the best place to be an FHA borrower.
Grand Rapids tops the rankings for non-prime credit share of FHA borrowers at 59% and FHA benefit with a down payment at just 22% of the amount paid by other borrowers.

Ohio, Pennsylvania, Michigan and Indiana present homebuying opportunities.
Twelve of the top 15 cities are in this cluster of industrial states. Access for first-time homebuyers is great as home prices have not outpaced the growth in the economy and affordability is high.

On the other side of the spectrum are markets where home prices and down payments are high, the FHA share is low, and home prices exceed affordability thresholds.

Most Challenging Cities of First-Time Homebuyers:

1. Denver
2. New York City
3. San Francisco
4. Austin, Texas
5. Las Vegas
6. Los Angeles
7. Oxnard, Calif.
8. Boston
9. Sacramento, Calif.
10. Miami

Denver is the most challenging.
Denver is not the most challenging city in any single measure, but weak showings across the board could create obstacles for first-time buyers. Down payments are high at $66,806, and even the FHA down payment is a considerable $22,841.

Many large cities in bottom 10.
New York, San Francisco, Los Angeles, Boston and Miami are all in the bottom to of our listing, scoring poorly across the board in our metrics. These metros have higher income inequality than the national average and higher home prices than the national average. This puts homes out of reach for many renters who also struggle to raise down payments given high rental prices.

Some surprising cities in the bottom 10.
Las Vegas and Austin both had very low shares of FHA and non-prime borrowers and didn’t rank particularly well in other metrics. These are both very popular smaller cities that may be seeing external buyers crowding out the local population.

“In addition to tight inventory boosting prices in many markets, first-time homebuyers must now contend with rising mortgage interest rates, further reducing their buying power,” said Tendayi Kapfidze, chief economist at LendingTree. “As affordability declines, borrowers should consider all the programs available to assist them in becoming homeowners, including FHA loans. A home can be a valuable asset for Americans, as long as consumers stick to homes well within their budgets.”

The full report is available here: https://www.lendingtree.com/home/mortgage/best-cities-for-first-time-homebuyers/

About LendingTree:

LendingTree (NASDAQ: TREE) is the nation’s leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 500 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:

Megan Greuling
Megan.Greuling@LendingTree.com
(704) 943-8208